Financial professionals across China are bracing for a new round of salary reforms that could further squeeze their paychecks, reports Caixin. Industry insiders told Caixin the changes are expected to flatten pay structures at state-owned financial institutions, which will dampen incentives and potentially cause talent to flee. In highly competitive fields where pay is closely tied to performance, many employees are already leaving for firms without compensation caps, they said.
The concern has mounted in recent months after the Ministry of Finance (MOF) issued guidelines to the headquarters of state-owned financial institutions, outlining a broad framework for a sector-wide overhaul and instructing them to draft detailed pay plans, Caixin learned from people familiar with the matter.
The guidelines follow a broader push by the Ministry of Human Resources and Social Security earlier this year to rein in excessive pay at state-owned enterprises (SOEs). Key measures put forward by the ministry include banning “inverted pay”—where lower-ranked employees earn more than their superiors, and setting annual pay ceilings for chiefs of central government-administered SOEs at around RMB 1 million ($140,000). But heads of subsidiaries, which typically engage more in market competition, are allowed to earn up to triple that amount. There is a clear tightening trend, an employee from a state-owned securities firm told Caixin, highlighting the RMB 3 million annual pay cap that was introduced at state-owned securities companies last year.