In recent days, several listed banks in mainland China have disclosed the situation of supplementary payments for executive pre-tax compensation from the previous year, with amounts generally ranging in the millions of yuan. This news has become a hot topic and sparked questioning of the bank’s compensation system, leading to concerns about exacerbating the wealth gap in society.
光大銀行 (Guangda Bank), Ping An Bank, Minsheng Bank, Zheshang Bank, and others have all recently disclosed the remaining portions of executive pre-tax compensation from the previous year, with supplementary amounts varying from hundreds of thousands to millions of yuan. Notably, several executives received over 2 million yuan in annual compensation supplements, including Ping An Bank’s Deputy President Yang Zhiqun and former President Hu Yuefei, Minsheng Bank’s Chairman Gao Yingxin, and Zheshang Bank’s Deputy President Luo Feng, with amounts ranging from 201.87 to 269.95 million yuan.
The income of executives in listed banks (directors, supervisors, and senior management) is typically divided into fixed wages and performance-related pay. According to regulations, performance-related pay may be subject to deferred payments, leading to only a portion of the remuneration being disclosed in the annual report.
Looking at the “supplementary payments” disclosed by Ping An Bank, for instance, both Yang Zhiqun and Hu Yuefei received over 5 million yuan in 2023. Hu Yuefei topped Ping An Bank’s compensation list with a total remuneration of 5.6228 million yuan, followed by Yang Zhiqun at 5.5796 million yuan and former Deputy President Guo Shibang, who has left the position, at 5.2986 million yuan.
Guangda Bank also released information on the remaining portions of executive pre-tax compensation for 2023. Five individuals from the bank, including Deputy President and Union Chairman Qi Ye, Deputy President and Risk Officer Yang Bingbing, Corporate Secretary and Chief Business Officer Zhang Xuyang, former Chairman Lu Hong, and former Deputy President Qu Liang, received a total of 2.8577 million yuan in supplementary payments.
In the supplementary announcement of Guangda Bank’s 2023 annual report, former Secretary of the Disciplinary Committee, Dong Tiefeng, did not have a specific supplementary payment recorded and was symbolized by a “-“. The bank explained that Dong Tiefeng’s 2023 compensation was subject to corresponding deductions and adjustments.
In March of this year, Dong Tiefeng relinquished his roles as a member of the Party Committee and Secretary of the Disciplinary Committee (at the level of Deputy President) at Guangda Bank due to work adjustments, and reports suggest he has since been transferred to an expert position in the bank’s Beijing branch.
Additionally, Guangda Bank’s “Performance Pay Deferred Payment Management Measures” reveal that over 40% of executive performance pay is subject to deferred payments lasting no less than 3 years. The bank’s announcement disclosed that the total deferred performance pay for the aforementioned six individuals in 2023 amounted to 5.0601 million yuan.
The news of several banks supplementing their executives’ 2023 salaries has drawn widespread attention and discussion from various sectors of society.
Particularly, the issue of “reverse salary recovery” in Chinese banks has gained popularity in recent months.
Earlier reports from Chinese media indicated that the average salary for employees in 20 listed banks and 29 securities firms had decreased in 2023. Eleven listed banks, including Bank of China, China Merchants Bank, Bohai Bank, Harbin Bank, and Tianjin Bank, detailed performance-based salary recovery in their annual reports, totaling nearly a billion yuan.
China Merchants Bank had the highest total amount of performance-based salary recovery, totaling 43.29 million yuan in 2023, involving 4,415 employees.
As the year draws to a close, many listed banks have supplemented their executives’ 2023 salaries, with figures typically reaching the million-yuan level. On December 31st, blogger “SmartStarWatcher” stated in a post that the supplementary amounts for some executives reached several million yuan, creating a stark contrast with the income of regular employees, undoubtedly widening the wealth gap in society and triggering profound reflections on the bank’s compensation system.
The article points out that high executive salaries are not isolated incidents but a prevalent phenomenon in the entire financial industry. With intensified competition in the financial market, banks are forced to adopt high-wage strategies to attract and retain top talent. However, this strategy harbors significant social risks. When there is a huge disparity between executive compensation and regular employees’ income, it not only leads to dissatisfaction and low morale among employees but also has the potential to spark social conflicts and instability.
“More importantly, high pay does not equate to high efficiency. The correlation between bank executives’ compensation and their job performance is not always tight. In fact, some executives, despite receiving high salaries, have not led the bank to significant performance improvements. Conversely, some grassroots employees, despite meager income, silently contribute to the stable development of the bank. This mismatch between compensation and contribution is undoubtedly a disrespect to employee labor efforts and a serious challenge to social fairness and justice.”
The article further highlights that the bank executives’ compensation system involves issues of managing and distributing state-owned assets. As banks owned by the public, the distribution of executive compensation should be more transparent, fair, and reasonable. However, in reality, there are cases of some executives exploiting their authority to illicitly obtain high salaries, harming the bank’s interests and severely undermining social fairness and justice.
The article suggests that these issues stem from flaws in our compensation system and distribution mechanism. It emphasizes that the salary issue is not solely an internal problem of banks but a challenge that the entire society needs to address collectively.