When the ＂salary limit order＂ of the financial industry strikes, will it reduce the salary for senior executives or increase the money for the grassroots？ This is a problem.
According to the report of Cailian, Ping An Bank (000001) started to reduce its salary, and the deferred bonus will be paid at a discount of 60% from July to September, and the future bonus distribution ratio will be adjusted according to the performance.
This action of Ping An Bank happened just after the Ministry of Finance issued the Notice on Further Strengthening the Financial Management of State-owned Financial Enterprises (hereinafter referred to as the Notice).
Because it involves optimizing the internal distribution structure, the Notice is generally interpreted as the "salary limit order" of the financial industry. From a macro point of view, the reform of the salary system in the banking industry has already been promoted internally. Ping An Bank’s move, no matter what the motivation, is part of the overall reform. The implementation of the Notice will once again deepen the influence of policies on the internal income distribution of banks, and salary restriction and differentiation will become the trend of the bank’s salary system at the same time.
For the banking industry, the reform of the salary system has already been promoted internally. The implementation of the Notice will once again deepen the influence of policies on the internal income distribution of banks, and salary restriction and differentiation will become the trend of the bank’s salary system at the same time.
Maybe in the near future, the adjustment of income such as salary limit and salary reduction will not only happen in a bank or a line, but whose adjustment? How is it adjusted? This is the focus of attention.
01
The adjustment space of stock banks is larger than that of state-owned banks.
Recently, the Ministry of Finance issued the Notice on Further Strengthening the Financial Management of State-owned Financial Enterprises (hereinafter referred to as the Notice).
The Notice is mainly aimed at central financial enterprises and other state-owned financial enterprises, which involves the internal income distribution of state-owned financial enterprises.
The Circular requires central financial enterprises and other financial state-owned enterprises to optimize the internal distribution structure, scientifically design the salary system, and reasonably control the post distribution level difference. And put forward specific policy requirements-"the average wage increase of headquarters employees should be lower than that of employees in the enterprise in principle, and the average wage increase of middle and senior management positions should not be higher than that of employees in the enterprise in principle."
This policy requirement is generally interpreted as the "salary limit order" of the financial industry. In fact, before the "Notice" was issued, the reform of the bank’s salary system had already begun.
For the six major banks, the salary of senior managers has been implemented in accordance with the policy of salary reform for heads of central enterprises since January 2015.
Judging from the annual salary of senior managers of six major state-owned banks in 2021. The annual salary of the chairman and president is generally around 810,000, while that of the vice president is around 75%. As a central financial enterprise, the six major banks have almost implemented a unified salary standard.
The "relatively free" stock banks have higher wages, and of course there are great differences.
The annual salary of the presidents of Minsheng Bank and China Merchants Bank (600036) is 4.3 million yuan and 4,198,300 yuan respectively, followed by Ping An Bank, with an annual salary of 3,879,500 yuan. The annual salary of the president of Shanghai Pudong Development Bank (600,000) is 2,832,500 yuan, and that of Zheshang Bank is 2,110,600 yuan.
The annual salary of senior managers in stock banks varies greatly.
Minsheng Bank, China Merchants Bank and Ping An Bank are at the same level. At one level, China Everbright Bank (601818), Shanghai Pudong Development Bank, Zheshang Bank and China CITIC Bank (601998), Industrial Bank (601166) and Huaxia Bank (600015) are the lowest. The annual salary of the president of Industrial Bank is 1,314,600 yuan, and the vice president is 1,183,000 yuan. The annual salary of the president of Huaxia Bank is only 678,500 yuan, and that of the vice president is 624,000 yuan.
Of course, among the stock banks, Minsheng Bank (600016) and Ping An Bank are private banks, and in principle, they are not affected by the Notice.
On the whole, at present, the annual salary of senior managers of six major state-owned banks is far lower than that of the first echelon and the second echelon of joint-stock banks. After the implementation of the Notice, the increase is limited, but the adjustment should also be limited. I am afraid that the stock banks will be more affected than the state-owned banks.
For stock banks, how to choose and adjust between reducing the salary of senior managers and improving the average salary at the grass-roots level is the next problem worthy of attention.
02
Internal differentiation-pricing by post becomes a trend
The Notice also mentioned that financial enterprises should reasonably control the post distribution grade difference, fully mobilize the enthusiasm of front-line employees and grass-roots employees, and effectively balance the income distribution relationship among leading bodies, middle-level cadres and grass-roots employees. If the average salary of headquarters employees is significantly higher than the average salary of employees in the enterprise, the total annual salary should be further increased to front-line employees and grass-roots employees.
In terms of income distribution, it is inclined to front-line employees and grass-roots employees. Specifically, the salary reform within banks has changed from administrative "pricing by person" to refined and professional "pricing by post".
Take the secretary of the board of directors and the chief risk officer as an example. In many banks, especially state-owned banks, the annual salary of the secretary of the board of directors and the chief risk officer is higher than that of the president and vice president. In large state-owned banks, the annual salary of the business director of the head office is also higher than that of the president and vice president. This is a manifestation that the salary of professional posts is higher than that of administrative posts.
From the perspective of per capita salary, in 2021, the average salary of CITIC Bank was 580,600 yuan. China Merchants Bank followed closely, with an average salary of 566,500 yuan in 2021, Industrial Bank 554,700 yuan, Ping An Bank 533,700 yuan, Zheshang Bank 531,100 yuan, Minsheng Bank 514,900 yuan and China Everbright Bank 468,700 yuan.
Generally speaking, the average salary of joint-stock banks is higher than that of state-owned banks and other banks. Judging from the data of listed stock banks, the average salary has remained at a relatively high level.
It seems that the level of joint-stock banks is higher than that of state-owned banks, both in terms of senior managers and average wages, and there seems to be more room for adjustment.
But in fact, we can’t simply understand the Notice as a "salary limit order". Because banks must also ensure the competitive advantage of key areas, key positions and high-potential talents.
In establishing the human resource system and incentive mechanism for scientific and technological talents, banks are actually benchmarking Internet technology enterprises. Banks must establish competitive management and compensation mechanisms in order to attract more and stronger scientific and technological talents. At present, on the whole, the salary of bank science and technology posts is still lower than that of internet technology companies in the head.
Therefore, the reform of the bank’s salary system will be more divided-tilted to the grassroots level and tilted to technical posts. The difference in salary will not only be reflected in different ranks, but also in different positions.
Another point worthy of attention is that the Notice requires the establishment and improvement of the deferred payment mechanism for salary distribution and the accountability and salary recovery mechanism.
For senior managers of financial enterprises and employees who have a direct or important impact on risks, the basic salary is generally not higher than 35% of the total salary, and performance pay is deferred according to the assessment of business income and risk by stages. More than 40% of performance pay should be deferred, and the deferred payment period is generally not less than 3 years.
At this point, all listed banks have established a deferred payment mechanism and a recourse deduction mechanism for senior managers’ performance pay in accordance with the requirements of supervision and the Guidelines for Steady Pay Supervision of Commercial Banks. The total pre-tax compensation we see in the financial report includes the performance to be deferred.
The specific way is to set aside a certain proportion of the executive performance pay every year. The performance pay of senior managers is set with deferred payment, and the general deferred payment period is 3 years. During the assessment period, if there is any violation of rules and regulations or abnormal exposure of risks within the duties, the risk fund of the relevant responsible person will be deducted accordingly. Performance-based compensation recovery and deduction regulations apply to those who have left or retired.
Generally speaking, the trend of income distribution within the bank is also clear-the top is limited and inclined to the grassroots, from rank pricing to post pricing.
Author’s e-mail:
xuyingxia@xiaojinjie.com.cn
This article is an original manuscript of the consumer industry, and it is refused to be reproduced without permission, otherwise legal responsibility will be investigated.
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