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Top executives at China's largest securities firms have had their salaries cut over the past two years, according to disclosures, due to the downturn in financial markets and the Chinese government's efforts to reduce inequality.
Top three executives at China's major state-owned securities companies, including CSC Financial, CITIC, China International Capital Corporation (CICC), Huatai Securities and Guotai Jun'an Securities, received pay cuts in 2022 and 2023, according to data released by provider Wind. . Based on official disclosures.
Overall, nine of the top 10 brokerages by revenue recorded declines in compensation for their highest-paid employees last year.
At CICC, the top three executives earned RMB 7.3 million ($1 million) last year, compared to RMB 10.9 million in 2022 and RMB 25 million in 2021. For CITIC, the total amount was RMB 16.8 million, RMB 18.3 million and RMB 33. From RMB 9 million in each of the past two years, Guotai Junnan's salary has decreased from RMB 9.9 million in 2022 and RMB 12.1 million in 2021 to RMB 8 million in 2023.
China's vast financial market is dominated by state-backed brokerages, but Western investment banks have made limited inroads in recent years, and returns have been disappointing amid weak economic momentum and sluggish trading activity. The CSI300 index, which is made up of stocks listed in Shanghai and Shenzhen, has fallen nearly 40% since its peak in February 2021.
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The pay data is consistent with widely circulated anecdotes about deep cuts for mainland China's top financial figures, taking place in parallel with Xi Jinping's push for “common prosperity” and reduced inequality. . The president has also repeatedly emphasized the importance of the “real economy,” as opposed to finance and technology, as part of his campaign for “quality development.”
“Generally speaking, the more senior you are, the bigger the pay cut,” said Jason Bedford, a Singapore-based analyst. pointed out that it is expanding. .
He added that the decline in the financial sector was “the most extreme.” “It looks like the wage curve is flattening,” he said. “Bank tellers have not had their salaries reduced.”
The average salary of all employees at three securities companies, CICC, Shenwan Hongyuan, and Huatai, increased slightly in 2023. However, at all eight companies for which data is available last year, salaries decreased by at least 9% compared to 2021.
At CITIC, the highest paying company, the average employee earned RMB 797,000 ($110,000).
A Beijing-based banker at CICC said the pay cuts for mid-level executives were particularly harsh compared with entry-level employees and more established senior executives with whom the big brokerages compete.
He added that the continuation of salary cuts is in line with the overall tone of China's Central Financial Work Conference in October, chaired by Mr. Xi. “We have to listen to the party’s call,” he said.
CITIC, CSC Financial, CICC, Huatai, and Guotai Junan did not respond to requests for comment.
The financial disclosures of both companies provide little evidence of the salary cuts, but Guotai Jun'an Securities cited the Shanghai government's opinion dating back to 2015 regarding “deepening reform of the compensation system for leaders of state-owned enterprises” and said bonuses would be postponed. There is. .
In 2022, the China Securities Association released “Guidelines for securities companies to establish a robust compensation system''. Although the policy does not explicitly mention the obligation to reduce wages, it does refer to the need to “balance the pay levels of domestic employees.” Different Posts”.
Additional reporting by Cheng Leng in Hong Kong
