The financial industry will issue a ＂salary limit order＂ again, and establish and improve the deferred payment of executive compensation distribution.
After the "salary-drying" incident of CICC traders’ families, a recent "salary-limiting order" in the financial industry has aroused widespread concern.
On August 2, the Ministry of Finance issued the Notice of the Ministry of Finance on Further Strengthening the Financial Management of State-owned Financial Enterprises (hereinafter referred to as the Notice), which is divided into five parts with 14 articles, of which two focus on standardizing the salary of employees in financial enterprises.
The Notice proposes to optimize the internal income distribution structure, increase the total salary to grass-roots employees, establish and improve the mechanism of deferred payment and accountability for salary distribution, and require that the basic salary of financial executives and employees in important positions should generally not be higher than 35% of the total salary, and more than 40% of the performance salary should be deferred, and the deferred payment period should generally be no less than 3 years.
The financial industry has always been called "multi-gold industry". In the annual national average wage ranking, the financial industry’s salary has never fallen out of the top three.
Just at the end of July, the family of a trader in CICC disclosed her husband’s income certificate. The employee’s average monthly income of 82,500 yuan aroused widespread concern in society. In fact, the employee’s income was less than the average level. In 2021, the per capita salary of CICC reached 980,000 yuan, and even reached 1.16 million yuan in 2020.
Re-issue a "salary limit order"
The Notice requires that all central financial enterprises and financial enterprises in other countries should actively optimize the internal income distribution structure, give full play to the positive incentive role of wages and salaries, effectively implement the policy requirement that the average wage increase of headquarters employees should be lower than that of employees in their own enterprises in principle, and the average wage increase of middle and senior management positions should not be higher than that of employees in their own enterprises in principle.
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 that of employees in the enterprise, the total annual salary should be further increased to front-line employees and grass-roots employees.
In addition, financial enterprises should seriously allocate discipline, strictly clean up and standardize the extra-wage income, incorporate all wage income into the total wage management, and not charge any wage expenses such as allowances and subsidies in other forms besides the total wage, so as to realize the wage of income, the monetization of wages and the transparency of payment.
In the "establishing and improving the mechanism of deferred payment of salary distribution and compensation", the Notice requires that financial enterprises should comprehensively consider market conditions, performance, risk taking, salary strategy and other factors, scientifically set salary standards for different positions, and reasonably determine a certain proportion of performance pay.
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 business income and risk assessment by stages. More than 40% of performance pay should be deferred, and the deferred payment period is generally not less than 3 years, so as to ensure that the payment period of performance pay matches the risk duration of the corresponding business, unless otherwise stipulated by the state.
Financial enterprises should formulate a system of recourse and deduction of performance pay. If senior managers and employees in positions that have a direct or important impact on risks fail to perform their duties diligently, resulting in major violations of laws and regulations or major risk losses to financial enterprises, financial enterprises should recover part or all of the performance pay paid within the corresponding period and stop paying part or all of the unpaid pay according to laws and regulations and after performing corporate governance procedures. In principle, the recovery period of performance pay is the same as that of the relevant responsible person. The performance-based compensation recourse and deduction regulations apply to those who have left or retired.
In addition to limiting the salary income of senior executives, increasing the total salary to grass-roots employees, delaying payment and establishing a system of recourse and deduction of performance pay, the Notice also puts forward specific requirements for financial enterprises to strengthen financial budget management and reasonably control expenses. For example, financial enterprises are strictly forbidden to talk about ostentation and extravagance, put an end to extravagance and waste, and strictly prohibit the purchase and provision of high-end drinks when holding business banquets; It is strictly forbidden to purchase and build office buildings in violation of regulations, luxury decoration office buildings and high-grade office furniture; Financial enterprises should implement centralized procurement according to the procurement plan and incorporate it into the annual budget management; Strict implementation of the relevant provisions of the state on the personal treatment of employees, entertainment, fitness, tourism, entertainment, shopping, gifts and other expenses borne by individuals shall not be charged in the cost of enterprises.
Banks, securities and funds have joined the "salary-limited team" one after another.
Due to the generally high salary level in the financial industry, the "salary limit order" seems to have never stopped.
In April 2009, the Ministry of Finance issued the Notice on Issues Related to the Salary Distribution of Senior Executives of State-owned Financial Institutions in 2008, stipulating that the salary of senior executives of financial institutions in all countries in 2008 should be determined at no more than 90% of the salary in 2007; If the business performance declines, the salary of senior executives will be reduced by 10% on the basis of implementing the above principles; If the salary of senior executives in 2007 is obviously higher than the average level of the industry, on the basis of implementing the above policies, the decline of the salary of senior executives in 2008 should be correspondingly increased, and the gap with the average level of the industry should be narrowed actively.
In 2010, the Ministry of Finance issued the Measures for the Administration of Remuneration Audit of Heads of Central Financial Enterprises, and initially established a salary management mechanism that combines "salary and performance" and "long-term incentives and short-term incentives".
With the introduction of these policies and measures, the public’s voice for reforming the compensation management in the banking industry is even stronger. In March 2010, the CBRC issued the Guidelines for Steady Compensation Supervision of Commercial Banks (hereinafter referred to as the Guidelines).
According to the Guidelines, the basic salary of commercial banks is generally not higher than 35% of their total salary. Commercial bank executives and employees in positions that have an important impact on risks should pay more than 40% of their performance pay in the form of deferred payment, and the period of deferred payment is generally not less than 3 years, in which the proportion of deferred payment of performance pay for major senior managers should be higher than 50%, and 60% should be achieved if conditions permit.
Since the beginning of this year, the securities industry and the fund industry have also issued "salary limit orders".
In May, 2022, China Securities Industry Association issued "Guidelines for Securities Companies to Establish a Steady Salary System", pointing out that when formulating the salary system, securities companies should establish a deferred payment mechanism for the chairman, senior managers, heads of major business departments, heads of branches and core business personnel, and clarify the applicable conditions, payment standards, years and proportions. In the salary system, it should be clear that business should not be carried out through lump sum, personnel affiliation, etc., excessive incentives should not be implemented through independent assessment methods such as direct proportional sharing, and the salary income of employees should not be directly linked to the income of projects undertaken or contracted by them.
According to the first financial statistics, the average salary of 33 securities companies that released data last year reached 560,000 yuan, up 4% year-on-year. The highest per capita salary is CICC, which reached 980,000 yuan last year. In 2020, the per capita salary of CICC was as high as 1.16 million yuan, compared with 2021.
Followed by CITIC Securities and Guangfa Securities, the per capita salary is 850,000 yuan and 810,000 yuan. Even Huaan Securities and Oriental Fortune, which have the lowest per capita salary, have exceeded 300,000 yuan. Last year, the highest salary increase was Guolian Securities, with a per capita salary increase of 51%.
In addition, in June, China Fund Industry Association also issued "Guidelines on Performance Appraisal and Salary Management of Fund Management Companies", pointing out that fund management companies should establish and implement a deferred payment system for performance compensation, with a deferred payment period of not less than three years and a deferred payment speed of not less than an equal proportion.
The applicable scope of deferred payment system for performance pay includes but is not limited to the chairman of the board, senior managers, heads of major business departments, heads of branches and core business personnel. Among them, the amount of deferred payment by senior managers, fund managers and other key positions is not less than 40% in principle.