In 2024, senior executives at Chinese banks saw a widespread reduction in salaries, with 78.5% of these executives experiencing pay cuts, reaching a maximum decrease of 82.4%. Analysts attribute this trend to intensified industry competition and increased operational pressure.
According to a report by “Financial and Economic News” on May 24th, 2024 financial reports indicated that out of 42 A-share banks, 9 banks saw an increase in total compensation for their management, while 33 banks experienced decreases, accounting for 78.5% of the total. Among these, Changsha Bank reported the highest decrease, with senior executive compensation dropping to 2.485 million yuan in 2024 from 14.111 million yuan in 2023, marking a decrease of approximately 82.4%.
Among the 9 banks where total management compensation increased year-on-year, Huaxia Bank registered the highest growth. The yearly total compensation for senior executives at Huaxia Bank rose from 17.455 million yuan in 2023 to 23.991 million yuan in 2024, representing a 37.5% increase.
The report suggests that the salary cuts for senior executives reflect the changing landscape of the banking industry in recent years. With factors like narrowing interest rate spreads and fierce industry competition, banks are facing increased operational pressures, prompting many to emphasize cost reduction and efficiency enhancement in their financial reports.
Based on a report titled “Current Situation and Trends in Compensation Management for Senior Bank Executives in China” by the China Banking Association’s chief economist Ba Shusong and visiting scholar Zheng Zilong from Boston University’s School of Business, the average compensation for senior executives at large state-owned commercial banks was around 1.1 million yuan in 2014, which decreased to approximately 600,000 yuan in 2015. However, “in recent years, the average compensation for senior executives at large state-owned commercial banks has increased to around 800,000 yuan.”
According to statistics from “Financial and Economic News,” among the top ten banks in terms of total executive compensation, Minsheng Bank ranked the highest, reaching 40.4854 million yuan.