China acts to cut back big bankers' bonuses
Thursday 11 March 2010
Printable
EmailChina has tightened controls on pay for its top bankers, joining global efforts to limit risk by linking longer-term performance more closely to compensation.
Chinese banks must withhold at least 40 per cent of bonuses for top executives for a minimum of three years and can recover payments if poor performance causes losses, the China Banking Regulatory Commission announced on Wednesday.
China's banks avoided the mortgage-related turmoil that battered Western firms in the global financial crisis. But regulators are trying to improve risk management as the government liberalises the state-owned industry.
"We should learn advanced ideas from other countries around the world after the financial crisis to reform this remuneration system for financial institutions," the CBRC said in a statement.
Bank bonuses will be capped at three times an executive's base salary, the agency said. It said the rules would apply to banks, trust companies and financial units of other government-owned enterprises.
China's top bankers are paid modestly by Western standards but receive many times the salary of the average Chinese worker, fuelling public anger.
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