The data showed that pay cuts at the top 10 brokerages ranged from 1.2% to 27%, with Shanghai-based Shenwan Hongyuan Group cutting salaries the most. The average salary at CITIC Securities, the largest company by sales, fell 5.3% to 792,000 yuan (US$109,492) last year, while the average wage at its next biggest rival, Guotai Jun'an Securities, fell 10% to 668,000 yuan. Ta. Original.
The average income of CICC employees was 700,000 yuan, down 15% from the previous year.
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The predicament reflects both regulatory pressures and the impact of three years of market weakness in an industry once known as one of China's highest-paying industries.
Jason Bedford, a former China analyst at Bridgewater and UBS Group, said the most extreme pay cuts ordered by the government “appear to have been in the financial services sector, because it has received special attention for its hedonism. Because it was done,” he said.
Pay cuts also applied to the most senior executives. The salary paid to CITIC Securities Chairman Zhang Youjun decreased from 5.6 million yuan the previous year to 5.05 million yuan in 2023, according to the company's annual report.
CICC's president, Mr. Wu Bo, earned an annual salary of 1.7 million yuan last year, when there was no chief executive officer. This is about half of the 3.48 million yuan paid to then-CEO Huang Zhaohui in 2022, when the company had no president and Huang was in the top management role.
In 2022, the wife of a young trader at CICC sparked public outrage by flaunting her husband's monthly salary of 80,000 yuan on social media, prompting regulators to intervene and require the entire industry to implement pay cuts. As a result, average compensation in the sector fell from 659,000 yuan in 2021 to 543,000 yuan in the same year, according to wind data.
A notice issued by the Ministry of Finance in the same year required state-owned financial institutions to strengthen budget controls by capping wage increases for senior staff on a company-wide average and by limiting expenses in areas such as business travel and office decoration. .
After President Xi Jinping advocated the concept of “common prosperity,” the financial industry became a key focus of his anti-corruption campaign. The concept has been interpreted as a way to narrow the gap between rich and poor, which has widened rapidly in China over the past few decades.
An employee in the fixed income department of a top brokerage firm, who spoke on condition of anonymity, said the pay cut was “understood and I'm in favor of it.” “Even after the layoffs, the financial industry is still a high-paying industry. I'm being more careful with my spending now, so it's affecting me to some extent.”
Due to the stock market slump, securities companies are also becoming more cautious about splurging on wages. According to Kaitong Securities, the 26 listed securities companies that announced their annual results saw their profits decline by an average of 4% compared to the same period last year. According to the annual results, CITIC Securities' net profit decreased by 7.5% last year, and CCIC's decreased by 19%.
China's stock market is showing signs of bottoming out thanks to a flurry of regulatory interventions, but some bailouts could put further pressure on the securities industry and dim the outlook for 2024.
“This year's salaries at securities firms are not encouraging given the mandatory salary reduction regulations,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai.
“Salary levels may depend on market performance, but even if the market goes up and we end the year, I don't think salaries will go up.”
