Wang Shi's position is at stake. How should the founder control the company?
Yesterday morning, the email from Qin Zhi, CEO of Autohome, to the internal staff of the company flowed out. The email showed that after Ping An became the largest shareholder of Autohome, the original management of Autohome would be cleaned by Ping An, and the CEO position of Qin Zhi and CFO position of Zhong Yiqi had been replaced.
On the same day, a war broke out between the major shareholders and the management family of Vanke. Baonengsi, the largest shareholder of Vanke, proposed to remove Wang Shi, the chairman of Vanke. At present, Baoneng holds 24% shares, and China Resources, the second largest shareholder, holds 15% shares. Both parties hold nearly 40% shares in total. Once they unite, it will be easy to remove Wang Shi.
The tragedies of Wang Shi and Qin Zhi both resulted from the loss of control of the company
Behind the embarrassment of Qin Zhi and Wang Shi is the gradual loss of control of the management of the two companies, which has led to the current situation.
It is reported that Ping An holds 47.4% of the shares of Autohome as the single largest shareholder, and Aodian continues to hold 6.5% of the shares of Autohome. At the same time, Qin Zhi, CEO of Autohome, holds 2.9% of the shares, and Li Xiang, founder of Autohome, holds 2.6% of the shares. Since the voting rights are equivalent to the shareholding ratio, the voting rights of Qin Zhi and Li Xiang are not worth mentioning in terms of relative safety, This also explains why Ping An can easily kick Qin Zhi out of the game.
As far as Vanke is concerned, in fact, this is not the first time that it was invaded by "barbarians", but Wang Shi has no long memory. As early as 1994, Vanke broke out a "Jun Wan battle" because of the dispersion of its equity - Jun'an Securities tried to unite several major shareholders to force Vanke's management to court, trying to seize control from Wang Shi.
Subsequently, Vanke suspended trading for three days, found out the sign of Jun'an Securities opening a "rat warehouse", and gave it to the securities regulatory department. The CSRC then sent a special person to Shenzhen to investigate, and finally Jun'an Securities voluntarily gave up restructuring, which helped the management led by Wang Shi get rid of the crisis.
However, Wang Shi did not learn a lesson from it, so as to change the ownership structure with too dispersed shareholding. He even said in his autobiography that Vanke's equity dispersion is rare in China's securities market.
Now, the opportunity for Wang Shi and Yu Liang, president of Vanke, is very slim, unless the second largest shareholder, China Resources, is on their side again. But Wang Shi accused China Resources of "tearing off all the fig leaf" in the WeChat circle of friends this morning. Is it possible for China Resources to support him?
Where to go CEO Zhuang Chenchao was also embarrassed
In the Internet industry, there are no fewer enterprises whose management shares are diluted to single digits. Once the "barbarians" enter, the story of the next Auto Home or Vanke is likely to happen, and the company's management will be in danger of being kicked out.
In fact, similar situations are still happening. According to the documents submitted by Qunar to the SEC in April 2015, the entire Qunar executive team held 14.5% of the shares, Baidu accounted for 51.4% of the total equity, and Baidu had about 68.7% of the voting rights.
At the beginning of January this year, Qunar officially married Ctrip, and then Qunar CEO Zhuang Chenchao announced his resignation. It is reported that Zhuang Chenchao actually opposed the marriage before, but because Baidu, the marriage leader, has more than 50% of the voting rights, Zhuang Chenchao's opinion has become irrelevant, and finally he was forced to accept and choose out.
How Liu Qiangdong and Chen Yizhou Control the Company
However, there is no lack of examples of management firmly holding the company in their own hands in the Internet industry. Among them, Liu Qiangdong, CEO of JD Group, and Chen Yizhou, CEO of Renren Company are better managers in this regard.
According to the 20F document submitted by Renren to the SEC in May this year, the CEO of Renren holds 29.5% of the shares, but has up to 48.4% of the voting rights; All directors and managers of Renren Company, including Chen Yizhou, hold 42.4% of shares, while the voting rights are up to 52%, which means that the management has absolute control over the company.
In contrast, although DCM, the investor of Renren, holds 8.6% of the equity of Renren, it only holds 2.3% of the voting rights of the company.
Liu Qiangdong has achieved perfection in this respect. It is reported that although Liu Qiangdong holds only 15.4% of shares in JD, his voting rights have reached 77.0%, and he has absolute control over JD. How did he do all this?
According to JD's prospectus submitted to the SEC in 2014, after the IPO, the two companies controlled by Liu Qiangdong held 20.5% of JD's shares, all of which were Class B shares. According to the rule that the voting rights of Class AB shares are 1 to 20, Liu Qiangdong will have 83.75% of JD's voting rights. That is to say, even after several rounds of financing until IPO, Liu Qiangdong still absolutely controls JD, and his voice in JD can not be shaken.
According to the documents submitted to the SEC by JD at the beginning of this year, as of February 29, 2016, Liu Qiangdong, CEO of JD Group, directly held 449444989 shares through Max Smart Limited, accounting for 16.2% of the shares, of which Max Smart Limited held 71.5% of the voting rights Fortune Rising Holdings Limited holds 2% of the shares and has about 9.3% of the voting rights, which are also owned by Liu Qiangdong. This means that Liu Qiangdong has 80.9% of the voting rights.
Liu Qiangdong's control of the company is as sensitive as a tiger to territory. According to the report of China Entrepreneur, in 2011, Wal Mart, a retail giant, had negotiations with JD for half a year, and the valuation has been all settled. Near the signing of the agreement, Liu Qiangdong found that Wal Mart required to take control of JD in the future until it completely acquired JD. He said that he knew nothing about capital, but when he saw such a clause, he found that it was "essentially impossible".
It is reported that Jingdong bought store 1 from Wal Mart last week with shares worth 9.5 billion yuan, and introduced Wal Mart as a strategic shareholder. After the transaction was completed, Wal Mart's shareholding was 4.97%. At the same time, Liu Qiangdong's shareholding was diluted from 16.2% to 15.4%, while his voting right was changed from 80.9% to 77.0%, still having absolute voice.
Liu Qiangdong is famous for his strength in both internal and external subordinates of the company and external treatment of investors. Even Xu Xin, the founder of Today Capital, who made more than $2 billion by investing in JD at one fell swoop, said publicly that he had known Liu Qiangdong for many years, but found that he was always very strong, even though Bezos, the founder of Amazon, was not as strong as him. However, Liu Qiangdong finally proved himself right with his actions.
Liu Qiangdong once said that his strength is the premise to ensure that Jingdong will not hit the rocks. Almost all investors have experienced his stubbornness. All entrepreneurs care about control, but he will not obscure it. "For a fast-growing company, how terrible it is that the founder does not have control! It is like a car without a driver, or a ship without a captain." Liu Qiangdong said.
