Analysis of the Relationship Between Executive Compensation and Profit at Aitech Automotive Electronics

Based on the collected prospectus and public information of Aitech Automotive Electronics Co., Ltd., I will conduct a systematic analysis of the relationship between the company’s executive compensation and profit.

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Aitech is an industry-leading provider of intelligent automotive electronics solutions, mainly engaged in the R&D, production and sales of automotive electronic products in four functional domains: body domain, intelligent cockpit domain, powertrain domain and intelligent driving domain [0]. Founded in 2002, the company has been deeply engaged in the automotive electronics field for more than 20 years, and its initial public offering (IPO) was reviewed by the Listing Review Committee of the Shanghai Stock Exchange on January 20, 2026 [0].

According to statistics from Gaogong Intelligent Vehicle Research Institute, Aitech held a 25.50% share in the front-loading standard body (domain) controller (including zone controller) market for self-owned brand passenger vehicles in China in 2024, ranking first for three consecutive years; its share in remote physical keys was 13.83%, ranking first; its share in cockpit domain and display assembly was 6.41%, ranking third [0].

Year	Total Compensation (RMB 10,000)	Total Profit (RMB 10,000)	Proportion
2024	1,303.95	22,468.77	5.80%
2023	1,140.32	20,693.32	5.51%
2022	954.27	9,072.58	10.52%

It can be seen from the data that the total executive compensation shows a year-on-year growth trend, increasing from RMB 9.5427 million in 2022 to RMB 13.0395 million in 2024, with a cumulative growth of 36.65%. However, the proportion of compensation to total profit decreased from 10.52% in 2022 to 5.80% in 2024, a decrease of nearly half, indicating that the company’s profit growth rate is significantly faster than the executive compensation growth rate [0].

Name	Position	Annual Compensation (RMB 10,000)
CHEN ZEJIAN	Chairman, General Manager	345.51
Chen Yong	Deputy General Manager, Technical Director	148.04
Zhou Xiaoyun	Deputy General Manager	118.67
Hu Hailong	Director, Deputy General Manager	111.36
Tang Min	Deputy General Manager	72.25
Li Qiusheng	Director, Deputy General Manager, Chief Financial Officer, Secretary of the Board	71.61
Liu Chunpeng	Director	52.79
Yong Chenghao	Supervisor in Office Before the Abolition of the Supervisory Board, Deputy General Manager of Yilada	44.37
Chang Cheng	Supervisor in Office Before the Abolition of the Supervisory Board	28.28
Independent Directors (3 persons)	-	23.71

The company’s executive compensation mainly consists of wages, bonuses, allowances and other welfare benefits. Among them, CHEN ZEJIAN, Chairman and General Manager, has an annual salary of RMB 3.4551 million, and he is the actual controller and core decision-maker of the company; Chen Yong, Technical Director, has an annual salary of RMB 1.4804 million, which reflects the company’s emphasis on technical talents [0].

A comparative analysis of executive compensation and corporate profit shows that the total executive compensation of RMB 13.0395 million in 2024 only accounts for 5.80% of the total profit of RMB 224.6877 million, a ratio that is at the lower-middle level among manufacturing enterprises. Compared with 2022, the proportion of compensation decreased from 10.52% to 5.80%, reflecting that the substantial improvement of the company’s profitability has effectively diluted the impact of executive compensation [0].

Indicator	2022	2023	2024	Compound Growth Rate
Operating Revenue (RMB 10,000)	217,441.43	300,791.63	346,792.85	26.18%
Net Profit (RMB 10,000)	9,414.40	19,732.94	21,318.69	50.42%
Net Profit Excluding Non-Recurring Gains and Losses (RMB 10,000)	7,749.01	17,437.65	20,295.82	61.72%
Executive Compensation (RMB 10,000)	954.27	1,140.32	1,303.95	16.92%

It can be seen from the above data that the compound growth rate of the company’s net profit (50.42%) and the compound growth rate of net profit excluding non-recurring gains and losses (61.72%) are both much higher than the growth rate of executive compensation (16.92%). This means that the increase in executive compensation has not caused substantial erosion to the company’s profit; on the contrary, during the company’s rapid development, the growth of executive compensation is relatively lagging and restrained [0].

According to the prospectus, the composition of the company’s administrative expenses is as follows:

Year	Administrative Expenses (RMB 10,000)	Executive Compensation (RMB 10,000)	Proportion of Executive Compensation
2024	10,737.66	1,303.95	12.13%
2023	10,337.34	1,140.32	11.03%
2022	8,251.49	954.27	11.56%

The proportion of executive compensation in administrative expenses remains between 11% and 12%, which is relatively stable, and it is not the main component of administrative expenses. The main part of administrative expenses comes from items such as salaries of management staff, office expenses, depreciation and amortization [0].

CHEN ZEJIAN, the actual controller of the company, can control 34.36% of the company’s share voting rights, and holds the company’s shares through multiple shareholding platforms such as Zhuhai Hengqin Yingtai Investment Partnership and Zhuhai Hengqin Youtai Investment Partnership. In addition, the company has also established employee shareholding platforms such as Wuhu Boteke Enterprise Management Center, Wuhu Yitai Enterprise Management Center and Wuhu Shuntai Investment Partnership, covering core executives such as Hu Hailong, Li Qiusheng, Zhou Xiaoyun, Tang Min and Chen Yong [0].

This equity structure design enables executive compensation to not only include cash compensation, but also be deeply bound to the company’s long-term development through equity incentives, which is conducive to aligning the interests of executives with those of shareholders.

The company has 182 authorized patents, including 49 invention patents, and 874 R&D personnel, accounting for 46.29% of the total staff. In 2024, the R&D expense was RMB 180.0155 million, accounting for 5.19% of operating revenue. The compensation of the executive team, especially Chen Yong, Technical Director (RMB 1.4804 million), reflects the emphasis on technological innovation, which matches the company’s technology-driven strategy [0].

The company’s customers cover self-owned brands such as Chery Automobile, Changan Automobile, Great Wall Motor, SAIC Motor and Geely Automobile, as well as new forces such as Li Auto, XPeng Motors and Leapmotor, and indirectly supplies international brands such as Volvo and Audi through Bosch. In 2024, sales revenue to Chery Automobile, the largest customer, accounted for 53.89% of total revenue, with a large related-party sales amount [0].

The proportion of the company’s sales revenue to Chery Automobile increased from 27.60% in 2022 to 53.89% in 2024, with a related-party sales amount of RMB 1.868 billion. If there are major changes in Chery Automobile’s operating conditions or procurement strategies, it may have a significant impact on the company’s performance, thereby affecting the sustainability of executive compensation [0].

The automotive industry generally adopts a pricing strategy of high initial price followed by gradual reduction, and the annual price reduction policy will be transmitted to upstream suppliers. The average price of the company’s body domain electronic products decreased from RMB 90.12 in 2022 to RMB 102.74 in 2024 (rebounded to RMB 106.72 in the first half of 2025). If the annual price reduction range expands and cost transmission is not smooth, the profit margin will be squeezed, which may affect the company’s ability to pay executive compensation [0].

CHEN ZEJIAN only controls 34.36% of the company’s share voting rights, a relatively low ratio, which may pose a risk of control stability and indirectly affect the continuity of the company’s governance and executive compensation policies [0].

Based on the above analysis, Aitech’s executive compensation is generally within a reasonable range:

1. Reasonable Compensation Proportion
   : The proportion of executive compensation to total profit decreased from 10.52% in 2022 to 5.80% in 2024, which is at the lower-middle level among manufacturing enterprises and has not caused significant erosion to the company’s profit.

2. Strong Profit Growth
   : The compound growth rate of the company’s net profit excluding non-recurring gains and losses reaches 61.72%, far exceeding the 16.92% growth rate of executive compensation. Profit growth has effectively diluted the impact of compensation.

3. Optimized Compensation Structure
   : Executive compensation mainly consists of basic salary and performance bonuses, and is bound to the company’s long-term development through equity incentives, which is conducive to aligning interests.

4. Industry-Aligned Incentives
   : Considering the company’s technological leading position and market share in the automotive electronics field, the compensation level of core executives, especially the technical leader, matches the industry positioning and contributions.

: Investors should continue to pay attention to risk factors such as the company’s customer concentration, annual product price reduction and the stability of the actual controller, as these factors may have a more significant impact on the company’s future profitability and ability to pay executive compensation.

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[0] Sponsorship Letter for the Initial Public Offering and Listing on the Main Board of Wuhu Aitech Automotive Electronics Co., Ltd. by Huatai United Securities Co., Ltd. (http://static.sse.com.cn/stock/disclosure/announcement/c/202601/002079_20260113_0RMB.pdf)