Recently, the list of banks conducting retroactive salary investigations has been growing steadily, with measures such as salary limits, reductions, and retrievals becoming hot topics in the financial sector. Last year, the cumulative amount of “reverse salary recovery” by 11 listed banks in China amounted to nearly billions of yuan.
“Reverse salary recovery” refers to banks conducting retrospective investigations into employees’ past salaries. If any discrepancies are found in the money already paid out by the bank, they will request it back from the employees.
In a recent market rumor, it was mentioned that a central enterprise required its public mutual funds to retrieve salaries, while a major state-owned bank reduced salaries by 10% at its headquarters. This was followed by humorous phrases like “salary retrieval loans” circulating in the market.
According to a First Financial report, in 2023, the average salary of employees in 20 listed banks showed a decline, and in the concept sector of listed securities firms, 29 companies saw a decrease in average employee salaries.
Furthermore, the intensity of “reverse salary recovery” by banks continues to escalate, reaching a historical high in scale. In 2023, 11 listed banks including Bank of China, China Merchants Bank, Bohai Bank, Harbin Bank, and Tianjin Bank detailed the recovery of performance-based compensation in their annual reports, with the cumulative amount of “reverse salary recovery” nearing billions of yuan.
Among them, China Merchants Bank had the highest total amount of “reverse salary recovery”, with a total of 43.29 million yuan in performance-based compensation retrieved in 2023, involving 4415 employees.
Phenomena such as “cost reduction and efficiency enhancement”, “reverse salary recovery”, “mandatory leave”, “salary reduction”, and “recovery of performance-based compensation” have successively appeared in various fields in mainland China, including public servants, securities firms, and accounting firms, over the years, and have now emerged in the banking industry, indicating significant survival pressure in this sector.
The topic of “banks conducting reverse salary recovery” has become a trending discussion, with some netizens questioning if such practices are legally justified.
According to the self-introduction of the media outlet “Burning Books to Re-examine the World”, which claims to be a strategic, management, brand, and marketing consultant for multiple listed companies, the ultimate exposé from the reverse salary recovery by banks reveals deep-seated systemic issues in the financial industry. It boils down to a management problem. In the past when money was abundant, there was no performance assessment, leading to indiscriminate distribution and mismanagement of funds. Now that banks are facing financial constraints, they are settling past irregularities. Employees who were paid higher salaries despite poor performance are now being held accountable for their salaries.
The individual mentioned that the current reverse salary recovery is aimed at strengthening internal controls within banks and addressing loopholes in optimizing salary structures. Over the past few years, the rapid expansion of the financial market and the innovation of business practices have caused some banks to overlook the rationale and sustainability of their compensation policies. In some cases, unreasonable incentive measures were implemented in pursuit of performance, posing substantial risks to the long-term development of the banks.
He believes that reverse salary recovery may trigger a series of chain reactions, leading to employee dissatisfaction and impacting their work enthusiasm. After all, once something is deemed settled, having to return money creates discomfort for everyone involved.
“Reverse salary recovery could potentially ignite conflicts between banks and employees, leading to legal action taken by employees against banks. If management fails to handle the situation properly and uncovers significant irregularities, salary recovery alone may not be enough to remedy the situation.”