Bonus | Reports Suggest Some Bankers at State-Owned Financial Enterprises Face At Least 30% Bonus Cuts

[Shared Prosperity / Bankers / Bonuses] According to foreign reports citing sources, as China accelerates its salary reform in the financial industry, several senior bankers at state-owned financial institutions in China are facing at least a 30% reduction in bonuses.

Sources revealed that senior management at two large state-owned banks, including heads of various business departments, had their bonuses cut by 30% to 50% last year. It is also reported that the variable pay for department heads at a medium-sized national bank decreased by about 40% last year.

The report indicates that these measures have extended beyond the banking sector. Sources say that a large state-owned insurance company reduced the bonuses of mid-level managers by at least 30% at the end of last year for 2024.

However, recent rebound in M&A activity has led many Chinese securities firms to rebuild their business capabilities, with investment banking departments hiring dozens of junior and mid-level employees. To attract talent, some large brokerages have adjusted the base salaries of junior bankers back to pre-restructuring levels, but bonus pools remain tightly regulated.

In recent years, Beijing has vigorously promoted “common prosperity” and has cracked down on what it calls the “hedonistic” lifestyles of elite bankers, with a particular focus on correcting salary inversion issues. At the end of last year, China’s Ministry of Finance issued guidelines to major state-owned financial institutions, requiring them to submit formal plans for reforming their compensation models. While many institutions are still awaiting final approval from the Ministry of Finance, some have already begun retrospective salary reductions.