What’s new: Three Chinese banks withheld or recovered $11 million in performance-based pay last year, in a move to reduce high-risk behavior among executives and bankers.
China Merchants Bank Co. Ltd., China Bohai Bank Co. Ltd., and Bank of Jiujiang Co. Ltd. withheld or reclaimed 58.2 million yuan ($8.5 million), 17.6 million yuan and 1.6 million yuan of performance-based remuneration in 2022, respectively, according to their annual reports released in March.
The banks said they cut bonus pay for staff who had caused significant exposure to risks within their scope of responsibilities, or violated regulations and disciplines.
A total of 2,876 employees at China Merchants Bank and 370 employees at China Bohai Bank had their bonuses pared, each losing an average of more than 20,000 yuan and 47,000 yuan, respectively.
Bank of Jiujiang, a city commercial bank based in East China’s Jiangxi province, didn’t disclose the number of employees affected.
The background: In early 2021, the China Banking and Insurance Regulatory Commission (CBIRC) issued guidelines requiring banks and insurance companies to set up a system for withholding or reclaiming performance-based remuneration. The system applies to people who have resigned or retired.
In 2022, the Ministry of Finance said that all state-owned financial companies should set up such a system.
More than 95% of China’s banks and insurers have established the system, according to CBIRC data released last month.
Related: Chinese Banks Report Slower Profit Growth for 2022
Contact reporter Zhang Ziyu (ziyuzhang@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
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