ICBC's chairman suffered a 50-percent salary cut in 2015. (Photo : Reuters)
Chinese banks' big bosses are bearing the brunt of last year's pay reform as their 2015 salaries suffer a massive 50-percent deduction.
According to data gathered by Reuters, Industrial and Commercial Bank of China (ICBC) chairman Jiang Jianqing pocketed 52 percent less in 2015, earning only 550,000 yuan ($85,000). This is a measly 0.3 percent of what JPMorgan Chase & Co. chief executive Jamie Dimon made in the same year, Reuters noted.
Similarly, China Construction Bank chairman Wang Hongzhang saw his 2015 annual pay lowered to 600,000 yuan from 1.2 million yuan a year before.
China's move to control executive compensation at the country's top state-controlled lenders is on the back of disappointing profits made worse by a slower economy.
"The pay cuts at China's top banks come at a particularly challenging time as lenders battle with bad debts that have risen to a decade high," Reuters reported. "The banks are also struggling to grow their business due to a slowing economy."
The country's biggest lenders hit a 10-year low in terms of profits growth, accompanied by shrinking interest margins, non-performing loans and interest rate drop.
The cut in executive pay is also driven by Chinese leader Xi Jinping's anti-corruption crusade.
"Beijing has been cracking down on state extravagance as part of an anti-corruption campaign carried out under Mr. Xi," said The Wall Street Journal. "The austerity program has targeted everything from official cars to lavish banquets to delicacies such as shark fins and bird nests."
Under the pay reform, non-salary perks will be curbed while bank managers of underperforming firms will be held accountable.
Both bank chairmen and presidents are at the receiving end of the huge pay cut.
"Top bosses at 72 central government-owned firms, which include well-known conglomerates such as PetroChina, Sinopec and China Mobile, face pay cuts of up to 50 percent," reported the Straits Times.
