China’s State Banks Roll Out Pay Cuts, Salary Caps in Sweeping Reform
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China’s state-owned banks are bracing for deep pay cuts as a new round of compensation reform ripples across the financial sector, capping the salaries of mid-level executives and reshaping how money flows through the country’s biggest lenders.
The Finance Ministry has circulated guidelines to major state banks and financial firms, according to people familiar with the matter, setting the stage for each institution to craft its own detailed pay plans. The directives follow a broader policy push by the Ministry of Human Resources and Social Security earlier this year to narrow gaps and rein in excessive pay across state-owned enterprises.
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- China’s state-owned banks face pay cuts for mid- and senior-level executives, with ICBC capping general managers at 1 million yuan ($137,000), down from 1.5 million yuan.
- The reforms aim to align pay with rank and reduce corruption linked to pay disparities, while making pay more flexible at provincial branches and subsidiaries.
- More compensation will shift to frontline staff, but fewer young people are attracted to state-bank jobs due to reduced earning potential.
- Industrial and Commercial Bank of China
- The Industrial and Commercial Bank of China (ICBC), the world's largest lender, is facing significant pay cuts for its senior staff due to new compensation reforms. Department general managers at headquarters could see their annual pre-tax salaries capped at 1 million yuan, a reduction of over 30% for many. Division heads face an 800,000 yuan ceiling. These changes aim to address "inverted pay" and align compensation with authority.
- Agricultural Bank of China
- The Agricultural Bank of China is mentioned as one of the banks, alongside the Bank of China, that has pledged to direct more pay towards front-line and grassroots staff. This includes sales teams, credit officers, data analysts, and county-level employees involved in rural revitalization efforts.
- Bank of China
- The provided article content does not mention the Bank of China (中国银行) beyond its pledge to funnel more pay to sales teams, credit officers, data analysts, and county-level employees supporting rural revitalization. There is no further specific information about its operations, financial performance, or the impact of the compensation reforms on this particular bank.
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