Recently, leading insurance companies including Taikang and Sunshine Insurance have successively launched employee stock ownership plans, using "golden handcuffs" mechanisms to retain core talent. Among them, Taikang Insurance Group will utilize approximately 128 million treasury shares (accounting for 4.69% of total share capital) for its new plan, while Sunshine Insurance has introduced an employee stock ownership plan named "Evergreen Foundation," which will be submitted to the shareholders' meeting for approval on October 22.
This move is viewed as an important measure for insurance companies to bind core talent through equity ties and address operational pressures amid industry transformation and intensified talent competition.
Industry experts point out that the insurance industry has no shortage of personnel but lacks talent, particularly under low interest rates and capital market volatility. Retaining key talent in actuarial science, asset management, and technology is crucial. Employee stock ownership plans not only actively respond to regulatory advocacy for long-term incentives but also address challenges from low interest rate environments and talent competition through long-term incentive mechanisms of benefit sharing and risk sharing, both stabilizing morale and conveying development confidence to the market.
Stabilizing Morale to Address Industry Pressure
On September 30, Taikang Insurance Group issued an announcement disclosing the main provisions of the "Taikang Insurance Group Co., Ltd. Core Backbone Employee Stock Ownership Plan."
Taikang Insurance Group's employee stock ownership plan entrusts Taikang Asset Management Co., Ltd. (hereinafter referred to as "Taikang Asset Management") to establish the "Taikang Insurance Group Co., Ltd. Core Backbone Employee Stock Ownership Plan Entrusted Investment Special Account Asset Management Plan" in the name of the employee stock ownership plan to manage the employee stock ownership plan.
Taikang Insurance Group stated that the employee stock ownership plan has three main purposes: first, to establish a mechanism for benefit sharing and risk sharing between employees and shareholders, improve corporate governance, and achieve alignment of interests among shareholders, the company, and employees; second, to fully mobilize employee enthusiasm and creativity, advocate a performance culture of long-term service and value creation, and form long-term incentives for core management talent and professional technical backbone to ensure the company's long-term steady and sustainable development and create excellent performance; third, to continuously play the role of medium and long-term incentives and constraints to prevent medium and long-term risks for the company.
According to Taikang Insurance Group's employee stock ownership plan, Taikang Insurance Group will transfer 128 million treasury shares to Taikang Asset Management (representing the "Taikang Insurance Group Co., Ltd. Core Backbone Employee Stock Ownership Plan"), accounting for approximately 4.69060% of Taikang Insurance Group's total share capital. After completion of this transfer, Taikang Insurance Group will no longer hold "treasury shares."
Similarly, Sunshine Insurance Group also recently issued an announcement proposing to launch an employee stock ownership plan named "Evergreen Foundation" and plans to convene the first extraordinary shareholders' meeting of 2025 on October 22 to review the employee stock ownership plan-related proposals.
The scope of personnel participating in Sunshine Insurance Group's employee stock ownership plan includes senior management, key position personnel, and backbone employees who play corresponding roles in improving company performance and medium and long-term development. Specifically including: founding team members of the company, management team members at all levels of the company and member companies, management personnel, key position personnel, and backbone employees in business management, technology, investment, sales, and other areas. Additionally, employee tenure should generally be no less than two years; conditions may be appropriately relaxed for veteran employees with more than ten years of service.
Sunshine Insurance Group stated that to adapt to the new situation faced after the company's listing, strengthen strategic advancement and goal achievement, further enhance employee sense of belonging and responsibility, and realize value sharing between the company and employees, the company plans to establish an employee stock ownership plan.
Regarding the employee stock ownership plans of Taikang Insurance Group and Sunshine Insurance Group, Professor Wang Guojun from the Insurance College of the University of International Business and Economics stated that insurance companies have no shortage of personnel but lack talent, especially private enterprises. Attracting and retaining actuarial, asset management, and digitalization talent for transformation into new tracks such as health and wellness and technology is key to weathering economic cycles through the long night. Traditional compensation models struggle to retain core talent, while employee stock ownership plans compensate for insufficient fixed salary incentives through equity appreciation expectations, stimulating employee motivation.
Associate Director Zhang Yang from the Commercial Law and Network Information Law Research Center at Beijing University of Aeronautics and Astronautics Law School also analyzed that the current market environment makes insurance companies more dependent on internal governance and human capital stability. The employee stock ownership plans of Taikang and Sunshine Insurance are a re-implementation of the "risk sharing, long-term incentive" mechanism advocated by regulators. This is both incentive supplementation under salary limitation backgrounds and rebalancing of governance systems. Through employee self-funding, fair value subscription, and lock-up period arrangements, incentives are shifted from short-term compensation to long-term value co-creation.
Additionally, Professor Zhu Junsheng, a postdoctoral researcher in Applied Economics at Peking University, further analyzed that under current macro interest rate declines and increased capital market volatility, insurance companies face asset-side yield pressure and long-term liability duration management pressure. Stabilizing core teams to ensure investment and business continuity, risk management capabilities, and long-term strategic execution is crucial. Furthermore, leading insurance companies are accelerating layout in pension, annuity, and long-term protection businesses. These businesses emphasize long-term planning and steady operations, requiring deep participation of core talent in decision-making and asset allocation to ensure stable operations in low interest rate environments.
Restarting After Ten Years
Employee stock ownership plans for insurance institutions refer to institutional arrangements where insurance institutions, based on employee willingness and company autonomous decisions, enable employees to obtain and hold company equity through legal means for the long term, with equity returns distributed to employees according to agreements.
Employee stock ownership plans are not new in China's insurance industry. As early as the 1990s, China's insurance industry had explored employee stock ownership.
China Ping An pioneered the trial, cohesing teams through equity incentives. Around 2000, China Ping An again launched large-scale stock ownership arrangements, with employees purchasing shares at approximately 1.76 yuan per share, achieving over 30-fold book returns over more than ten years.
However, with public controversy and tightening regulation, in 2008 the former China Insurance Regulatory Commission required suspension of equity incentive and employee stock ownership plan implementation.
It wasn't until 2015 that the former China Insurance Regulatory Commission issued the "Notice on Relevant Matters Concerning Insurance Institutions' Implementation of Employee Stock Ownership Plans," establishing benefit-sharing mechanisms among shareholders, insurance institutions, and employees, improving insurance institution corporate governance structures, standardizing insurance institution compensation incentive mechanisms, promoting long-term steady development of insurance institutions, and enhancing risk prevention capabilities.
At that time, relevant officials from the former regulatory commission stated that employee stock ownership plans are effective tools for modern enterprise management. The insurance industry, as a talent-intensive and technology-intensive industry, urgently needs to establish benefit-sharing mechanisms through employee stock ownership to enhance insurance company operational efficiency and comprehensive strength.
Both Taikang Insurance Group and Sunshine Insurance Group, which recently announced employee stock ownership plans, had implemented such plans in 2015.
In July 2015, the former regulatory commission approved Taikang Life's acquisition of approximately 251 million shares held by CITIC Trust, with Taikang Life required to use all acquired shares for implementing employee stock ownership plans. In August 2016, the former regulatory commission agreed to Taikang Life's group restructuring, changing the company name to Taikang Insurance Group, with Taikang Insurance Group exclusively establishing Taikang Life.
In 2019, Taikang Insurance Group's previous core backbone employee stock ownership plan entered the disposal period. In July 2022, Taikang Insurance Group announced that it had repurchased 128 million company shares held by Taikang Asset Management (representing the "Taikang Insurance Group Co., Ltd. Core Backbone Employee Stock Ownership Plan"), representing 4.69060% of all issued company shares. After repurchase completion, the employee stock ownership plan no longer held company shares, with repurchased shares forming company "treasury stock." The treasury shares transferred by Taikang Insurance Group this time originated from the expiration disposal of the previous employee stock ownership plan.
Sunshine Insurance Group also launched an employee stock ownership plan in 2015, with a subscription price of 4 yuan per share. The stock ownership plan subscribed to a total of 440.78 million company shares, accounting for 4.26% of the company's total share capital after plan implementation. In April 2016, Sunshine Insurance Group's employee stock ownership plan completed target equity transfer registration, officially becoming a company shareholder.
Regarding Taikang Insurance Group and Sunshine Insurance Group's re-implementation of employee stock ownership plans after ten years, Zhang Yang stated that current insurance industry competition is gradually extending from simple dependence on asset returns to organizational resilience and core team stability. Restarting employee stock ownership plans at this time adds a layer of "benefit sharing, risk sharing" institutional arrangements on top of mature governance systems, reflecting insurance institutions' positive response to regulatory advocacy for long-termism and steady operation concepts.
A chief non-bank analyst from a securities firm stated that implementing employee stock ownership plans is an important tool for joint-stock enterprises to consolidate teams and retain core management and business personnel. After years of business model adjustments and channel reforms, the industry has entered a stable period, and capital market development trends are also stable and positive. Launching employee stock ownership plans has become an important means for insurance companies to grow stronger.
Zhu Junsheng pointed out that this move by Taikang Insurance Group and Sunshine Insurance Group not only helps stabilize core teams but also conveys confidence in company strategic continuity and steady operations to the market, customers, and investors. Especially under current interest rate declines, capital market volatility, and accelerated industry structural transformation, it further demonstrates firm determination for long-term business layout and sustainable growth.
Success or Failure of Employee Stock Ownership Depends on Institutional Design
After 2015, multiple insurance companies implemented employee stock ownership plans, including AIA, China Ping An, ZhongAn Online, and Guoyuan Agricultural Insurance.
However, not all cases were successful. For example, Century Life once faced legal disputes due to employee stock ownership plans.
In August 2025, 53 former employees of Century Life collectively sued Century Life, demanding payment of equity incentive amounts promised twelve years ago, totaling 80 million yuan.
Employee representatives pointed out that Century Life had promised that those leaving before five years of stock ownership could receive principal plus bank deposit interest; those leaving after five years would receive principal plus higher dividends. Many participants viewed it as "principal and interest guaranteed" fixed-income investment. However, as Century Life's operational conditions deteriorated, this promise remained unfulfilled.
Additionally, it's worth noting that according to media reports, this employee stock ownership plan had not been reported to financial regulatory authorities for thirteen years.
Industry insiders point out that current insurance company implementation of employee stock ownership plans serves both to convey external confidence and stabilize internal morale. However, to truly function effectively, the key lies in institutional design details.
Zhu Junsheng stated that the key to employee stock ownership plan institutional design lies in "exit mechanisms and information transparency." Without complete legal arrangements and liquidity design, employee stock ownership easily transforms from incentive tools to sources of conflict. To avoid similar problems and establish sound employee stock ownership plans, three pillars are needed: legal compliance, predictable exit, and information transparency.
Zhang Yang also pointed out three key points in employee stock ownership plan design: first, requiring employees to contribute their own funds, with companies not providing financial support including loans or guarantees; second, fair share transfer prices, otherwise employee stock ownership plans become disguised compensation, with employees' voluntary participation in stock ownership plans focusing not on low-price share acquisition but on share value appreciation from future company development or listing; third, lock-up periods to enable employee-company risk sharing.
It's understood that employee stock ownership plans and other equity incentive systems are known as "golden handcuffs." Employee stock ownership plans bind employees and company long-term interests together through equity binding, both enhancing sense of belonging and improving strategic execution.
The aforementioned analyst stated that employee stock ownership plans are only effective supplements to salary systems. Retaining core employees requires attractive compensation systems and promotion mechanisms; relying solely on employee stock ownership plans makes it difficult to truly retain core talent.
At the same time, they also stated that due to significant volatility in corresponding share values, employee stock ownership plans present characteristics of "incentives and constraints coexisting, returns and risks sharing." Good operational performance benefits company stock price increases, giving employees sufficient willingness to collaborate in promoting benign company operational development.
Additionally, regarding insurance company employee stock ownership plans, Wang Guojun also pointed out that some insurance companies may operate with form over substance, with employee stock ownership plans failing to provide real benefits to employees and instead being seen as tools for exploiting employees.
Zhu Junsheng emphasized that when implementing employee stock ownership or equity incentives, both strong binding and long-term incentives for core backbone must be ensured while preventing internal unfairness, morale division, and "elite-mass" opposition.
"Achieving balance between the two is both an institutional design issue and a governance and cultural issue," Zhu Junsheng stated. Balancing incentive gaps between core backbone and ordinary employees is not about avoiding differences but through "structured, transparent, tiered" mechanism design, making differentiation both have realistic foundations (different position values and contributions) and be generally understood and accepted by employees (process fairness, visible returns). When incentives and cultivation are combined, transparency and governance are emphasized together, employee stock ownership plans can retain key talent while maintaining organizational cohesion and internal fairness, truly promoting enterprise transformation toward "partnership culture."