China takes hard actions against income inequality - caps salaries

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https://www.yicaiglobal.com/news/china-caps-salaries-in-financial-sector-again

China Caps Salaries in Financial Sector Again

AN ZHUO

DATE:  AUG 04 2022

/ SOURCE:  YICAI

China Caps Salaries in Financial Sector Again

(Yicai Global) Aug. 4 -- Salaries at China's state-owned financial institutions need to be better managed and wages should be distributed more among lower-ranking workers, the Ministry of Finance said recently in the country’s latest move to rein in the sector’s extravagant payouts.

The basic salary of senior management in state-owned financial institutions must not exceed 35 percent of the total remuneration, according to a ministry document released on Aug. 2.

Forty percent of bonuses to top execs should be put off for at least three years and all subsidies and allowances must be counted toward the salary, it added.

Working in the finance sector has always been lucrative, and it has always scored within the top three best-paying industries.

Last month, the wife of a trader at China International Capital Corporation caused a social media storm when she revealed her husband’s income. But at over CNY80,000 (USD12,000) a month, it is still below the investment bank’s average.

The average annual salary in the securities sector advanced 4 percent last year from the year before to CNY560,000 (USD82,880), according to data from the 33 firms to release this information. Beijing-based CICC was the biggest payer, shelling out CNY980,000 (USD145,000) per employee on average last year and CNY1.16 million (USD170,000) in 2020.

In order to clamp down on such high earnings, China has issued multiple "salary restrict orders" in the past. In April 2009, the compensation of senior executives at state-owned financial institutions for 2008 was set at no more than 90 percent of the level in 2007.

The following year, the Ministry of Finance issued the Measures of Remuneration for People in Charge of a Central Enterprise and the China Banking Regulatory Commission issued the Supervisory Guidelines on Sound Compensation in Commercial Banks. The securities and fund industries introduced similar wage limitations later.

Editor: Kim Taylor

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