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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Breaking News

Breaking News

Beijing’s income imbalance rhetoric cuts CICC bonuses.

Photo Credit: Bobby Yip Photo Credit: Bobby Yip
Photo Credit: Bobby Yip Photo Credit: Bobby Yip

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Three sources said China International Capital Corp (CICC) (3908. HK) dealmakers’ incentives might be slashed by 40%, one of the financial sector’s biggest cuts in two years since a revived government drive to reduce income gaps.

One person claimed prominent dealmakers at China’s third-largest brokerage by market value will see their 2022 incentives slashed by two-thirds. However, another source claimed the incentives would be given soon.

All sources have firsthand information.

While COVID-19 control measures hampered dealmaking in the world’s second-largest economy, prominent Chinese investment banks’ wages have fallen in recent years.

Due to the government’s “shared prosperity” rhetoric, firms have decreased salaries and benefits, accelerating the trend.

For CICC, where awards have been high in previous years, the bonus drop is particularly significant when regulators strengthen a battle against excess in the $57 trillion banking sector.

The Central Commission for Discipline Inspection (CCDI) pledged to abolish the “financial elite,” “parity with the West,” hedonism, and the obsessive pursuit of “money exclusively” and “high-end taste” in February.

A week after dealmaker Bao Fan disappeared, the watchdog’s harshly worded article followed.

CICC and the CSRC declined to comment. The sources declined to be identified since they were not authorized to speak to the media.

Industry insiders said a top Chinese investment banker might make three million to 10 million yuan ($445,000 to $1.48 million) a year, minus stock incentives.

CICC’s dealmaker incentive cutbacks contributed to a 10.5% drop in company-wide pay to 11.9 billion yuan ($1.73 billion), with average salary falling 30% to 820,000 yuan.

Last year, when earnings decreased by 29%, top executives and board members received 56% less.

This month, New York State Comptroller Thomas DiNapoli reported that Wall Street bonuses decreased 26% to $176,700 from a record 2021.

Two sources said CICC requested milder salary cutbacks from key shareholder China Investment Corp (CIC) and other supervisory agencies this year but was told its proposal was too weak.

CIC did not comment.

Industry insiders claimed several investment banks had warned personnel not to post photos of lavish dinners or holidays on social media.

Two sources told Reuters that CICC published instructions in February prohibiting personnel from uploading anything that may reflect high wealth or a lavish lifestyle.


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