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LTN: China’s Financial Industry Asks Employees to Give Up Deferred Bonuses

Major Taiwanese news network Liberty Times Network (LTN) recently reported that, since Chinese leader Xi Jinping launched the “Shared Prosperity” campaign, several companies in China’s financial industry have implemented strict new restrictions on their senior employees to coordinate with the Xi’s policies. The era of high salaries for Chinese financial workers is coming to an end. China’s largest financial groups have asked senior employees to forego deferred bonuses and, in some cases, return salary from several years ago to comply with a pre-tax annual pay cap of RMB 2.9 million yuan (around US$399,047). Some mutual fund managers are also facing pressure to return non-compliant wages from previous years. Chinese state-owned financial institutions such as China Merchants Group, China Everbright Group and CITIC Group have conveyed the above guidance to employees in some of their departments in recent weeks, people familiar with the matter said. Highly paid financial workers, including investment bankers and fund managers, have been denounced by Beijing as “hedonistic” for their extravagant lifestyles and are among the groups hardest hit by Xi Jinping’s “shared prosperity” campaign. It is unclear at this moment how many financial institutions are subject to the guidance. The incomes of most of the high-ranking financial managers are from deferred bonuses.

Source: LTN, June 27, 2024