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, reports Caixin. 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.
At the Industrial and Commercial Bank of China (ICBC)—the world’s largest lender by assets and often dubbed the “universal bank”—draft proposals place sharp limits on senior staff pay, Caixin learned from insiders. Department general managers at headquarters could see their annual pre-tax salaries capped at RMB 1 million (about $137,000), down from as much as RMB 1.5 million previously. Division heads would face an RMB 800,000 ceiling.
That amounts to a pay cut of more than 30% for many of ICBC’s most senior managers. Roughly 200 people in the bank’s Beijing headquarters fall into this category, making them among the hardest hit by the reform.