China’s crackdown on high-flying finance executives sends jitters across brokerage industry
- Executives in the China’s top brokerages have taken massive pay cuts after the finance sector came under scrutiny from regulators
- The Communist Party’s top disciplinary watchdog warned that pay in the finance sector was higher than other industries and asked executives to maintain a low profile
When a Chinese woman flaunted her banker husband’s 80,000 yuan (US$11,562) a month salary on social media last year, she quickly drew the ire of common folk and the attention of regulators towards financial elites like her spouse.
The young CICC banker and his colleagues soon paid a heavy price for the folly, taking a pay cut of almost 50 per cent. This quickly spread across the sector, with employees taking pay cuts of some 20 per cent to 30 per cent last year, according to data compiled by the Post.
“Many departments saw a pay cut or pay freeze,” said an employee of Citic Securities, China’s largest brokerage company, who did not want to be named. “People feel that we earn much more than average, and the tone became quite vicious after the CICC social-media incident.”
“Now the core message is to cut costs wherever we can, from allowances to salaries to travel benefits,” the employee said, adding the brokerage’s parent, Citic Group, has instructed staff to only fly economy class for travel times of less than five hours, while cutting or even denying staff bonuses for the last financial year.
