Mainland Financial Firms’ Hong Kong Units Tell Staff to Repay Bonuses

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President Xi Jinping’s drive to ensure finance better serves the real economy and the “common prosperity” campaign to reduce inequity are adding pressure on the industry to rein in salaries and bonuses.

Pay cuts sweeping China’s financial industry have arrived in Hong Kong, with some employees of Chinese mainland firms’ subsidiaries in the city being required to hand back bonuses they’ve already received, people with knowledge of the matter told Caixin.

The clawback amounts to more than HK$10 million ($1.3 million) for some employees, the people said.

Some staff at China Everbright Ltd. — a Hong Kong-traded subsidiary of state-owned financial giant China Everbright Group Ltd. — have had to pay back some of their bonuses for certain projects, sources close to the company said. These requirements were made over the past three years, during which anti-graft watchdogs inspected the parent company.

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Pay cuts and bonus clawbacks are impacting China’s financial industry, extending to Hong Kong subsidiaries like China Everbright Ltd.
The clawbacks can reach over HK$10 million ($1.3 million) and impact deferred bonuses, creating discontent and potential contract breaches.
Tightening regulatory oversight, sluggish economic growth, and the 'common prosperity' campaign are pressuring the finance sector, leading to layoffs and salary spending cuts through personnel relocation.

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Who’s Who

China Everbright Group Ltd.: China Everbright Group Ltd. is a state-owned financial giant whose Hong Kong-traded subsidiary, China Everbright Ltd., has been affected by pay cuts and bonus clawbacks. These actions are part of broader financial industry adjustments and anti-graft inspections over the past three years. Some staff at Everbright Ltd. have had to return bonuses, and deferred bonuses for certain projects have been canceled, contributing to net losses in recent years.

Everbright Ltd.: Everbright Ltd., a Hong Kong-traded subsidiary of state-owned China Everbright Group Ltd., has been involved in clamping down on bonuses amid anti-graft inspections of its parent company. Employees have had to repay bonuses, some exceeding HK$10 million. Deferred bonuses for certain projects might never be paid. The company reported a net loss of HK$7.4 billion in 2022, which narrowed to HK$1.9 billion last year.

China Huarong International Holdings Ltd.: China Huarong International Holdings Ltd., a subsidiary of state-owned China Citic Financial Asset Management Co. Ltd., has required some senior executives and former employees to repay a part of their bonuses, as reported by Bloomberg. This move aligns with broader trends of bonus clawbacks and financial adjustments affecting subsidiaries of mainland financial institutions in Hong Kong.

China Citic Financial Asset Management Co. Ltd.: China Citic Financial Asset Management Co. Ltd. oversees Hong Kong-incorporated China Huarong International Holdings Ltd. This subsidiary has required some senior executives and former employees to repay some of their bonuses. The clawback reflects the broader trend of pay cuts and bonus reclamations hitting Chinese financial firms' Hong Kong subsidiaries.

CCB International (Holdings) Ltd.: CCB International (Holdings) Ltd., a subsidiary of China Construction Bank Corp. (one of China’s "Big Four" state lenders), is cutting its Hong Kong staff, potentially affecting nearly 100 employees. This move is part of a larger trend among mainland financial firms' Hong Kong subsidiaries to reduce salary spending and address financial losses.

China Construction Bank Corp.: China Construction Bank Corp. is one of China’s "Big Four" state lenders. Its subsidiary, CCB International (Holdings) Ltd., is cutting its Hong Kong staff, potentially affecting nearly 100 employees, according to the article.

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What Happened When

2022：: Everbright Ltd.’s net loss totaled HK$7.4 billion.

2023：: Everbright Ltd.'s net loss narrowed to HK$1.9 billion.

Between 2021 and 2024：: Anti-graft watchdogs inspected China Everbright Group Ltd.

2024-07-16：: Bloomberg reported that China Huarong International Holdings Ltd. required some senior executives and former employees to repay some of their bonuses.

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