Chinese securities regulators and industry associations have instructed local and foreign banks to rein in executive pay levels, in the latest sign that Xi Jinping’s drive to promote “common prosperity” is gathering pace ahead of a crucial party congress later this year, reports the Financial Times.
On Friday, the Asset Management Association of China instructed fund houses to “enhance [their] social responsibility and capability to serve the economy and the country’s strategies.” According to the AMAC’s new rules, at least 40% of bonus payments to senior staff should be deferred for three or more years.
The association also decreed that senior staff should invest at least 20% of their bonuses in financial products issued by their own companies. It added that the guidelines were intended to corral “risk-taking behaviour and potential risks” stemming from executives’ pursuit of short-term bonus payouts.
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