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LTN: China’s Top Brokerage Slashes Employee Salaries

Major Taiwanese news network Liberty Times Network (LTN) recently reported that CICC (China International Capital Corporation), the leading firm in China’s securities industry, is cutting the base salary of investment banking employees by up to 25 percent. This move is expected to affect more than 2,000 employees. In addition, CICC is also considering cutting headcount in Hong Kong’s offshore investment banking department. The market believes this reflects a weak IPO market in China and Hong Kong, with investment banking operations under tremendous pressure.

CICC is China’s largest investment bank. Last year, it cut employee bonuses by as much as 40 percent in response to Beijing’s call for “common prosperity.” Now, only a year later, CICC is cutting salaries by another quarter. CICC’s largest Chinese competitor, CITIC Securities, has also reportedly lowered the salary of its investment banking department, cutting base salaries by 15 percent, with some employees seeing cuts of up to 20 percent. According to London Stock Exchange Group (LSEG), funds raised by Chinese companies through initial public offerings (IPOs) fell sharply by 80 percent year-over-year in the first quarter of this year.

Source: LTN, April 29, 2024