China’s stockbrokers see salaries slashed for second year amid slumping market, crackdown on flashy finance executives

Name: China airs 4-part anti-corruption series on prime-time TV amid renewed crackdown on graft
Uploaded: 2024-04-09T23:30:15.000Z
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Description: China airs 4-part anti-corruption series on prime-time TV amid renewed crackdown on graft

The pay cuts for the top 10 brokerages ranged from 1.2 to 27 per cent last year after the industry ‘was singled out for its hedonism’ by watchdogs

A slumping stock market has dented brokerages’ profits, making them more cautious about splurging on wages

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‘The most extreme pay cuts have been in the financial services sector because that was an area that was singled out for its hedonism,’ says Jason Bedford, a former China analyst with Bridgewater and UBS Group. Photo: Shutterstock

Zhang Shidongin ShanghaiandYuke Xiein Beijing

Published: 7:30am, 10 Apr 2024

China’s stockbrokers took a pay cut for a second straight year in 2023 as the double whammy of a slumping equities market and a government crackdown on corporate extravagance eroded the incomes of financial workers.

Data from the 10 biggest brokerages, from Citic Securities to China International Capital Corp (CICC), all showed a reduction in salaries bills last year.

While some smaller securities firms are yet to release their annual results, wages are likely to have taken a hit across the industry, according to data compiled by the Post and Wind Information.

The pay cuts among the top 10 brokerages ranged from 1.2 per cent to 27 per cent, with Shanghai-based Shenwan Hongyuan Group slashing salaries the most, the data shows. The average salary at Citic Securities, the biggest of the firms by revenue, dropped by 5.3 per cent to 792,000 yuan (US$109,492) last year, while wages at its next-largest rival, Guotai Junan Securities, fell by 10 per cent to 668,000 yuan.

CICC’s employees earned an average of 700,000 yuan, a 15 per cent decline from the previous year.

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China airs 4-part anti-corruption series on prime-time TV amid renewed crackdown on graft

The predicament reflects both regulatory pressure and the fallout from a three-year market slump in an industry once hailed as one of the highest-paid in China.