HONG KONG/SHANGHAI (Reuters) - Dealmakers at China International Capital Corp (CICC) will see bonuses slashed by as much as 40%, three sources said, in one of the financial sector's biggest cuts in two years since a renewed government push to narrow income disparity.
Some senior dealmakers at China's third-largest brokerage by market value will see an even steeper cut of two-thirds to their 2022 bonuses, said one of the people. A second person said the bonuses will be paid out in coming days.
All the sources have direct knowledge of the matter.
Wages at leading Chinese investment banks have been trending downward in the last couple of years as COVID-19 containment measures slowed dealmaking activity in the world's second-largest economy.
The trend has accelerated as employers cut pay and perks in response to the government's "common prosperity" rhetoric.
But at CICC, where payouts have been toward the high end in recent years, the bonus cut is particularly steep, coming at a time when authorities are intensifying a campaign against displays of extravagance in the $57 trillion financial sector.
In February, the Central Commission for Discipline Inspection (CCDI) vowed to eliminate notions of a "financial elite" and "parity with the West" as well as hedonism and the excessive pursuit of "money only" and "high-end taste".
The watchdog's strongly worded article came a week after the disappearance of dealmaker Bao Fan, the latest in a series of cases of executives vanishing with little explanation.
Neither CICC nor the China Securities Regulatory Commission responded to requests for comment. The sources declined to be identified as they were not authorised to speak with media.
A senior investment banker in China could earn three million to 10 million yuan ($445,000 to $1.48 million) a year in total remuneration, excluding stock incentives, industry sources have said.
CICC's dealmaker bonus cuts fold into a 10.5% decline in company-wide remuneration at 11.9 billion yuan ($1.73 billion), when average salary fell 30% to 820,000 yuan.
For top executives and board members, total payout shrank 56%, showed annual results for last year, when profit fell 29%.
By way of comparison, Wall Street bonuses fell 26% last year to average $176,700, versus a record 2021, showed a report last month from New York State Comptroller Thomas DiNapoli.
CICC sought approval for milder pay cuts this year from top shareholder China Investment Corp (CIC) and other supervisory bodies, but has been informed its proposal was not aggressive enough, two of the sources said.
Sovereign wealth fund CIC did not respond to a request for comment.
Besides remuneration cuts, some investment banks have asked staff to avoid displays of wealth such as by uploading photographs to social media of expensive meals or overseas trips, industry sources said.
CICC in February issued guidelines asking staff to refrain from posting content that may reveal high income or a luxurious lifestyle, two people with knowledge of the matter told Reuters.
($1 = 6.8796 Chinese yuan renminbi)
(Reporting by Selena Li in Hong Kong and Shanghai newsroom; Editing by Sumeet Chatterjee and Christopher Cushing)