Per reporter Zhao Jingjing Per editor Chen Xu
The performance-based pay received by bank employees is also facing recourse. According to the annual reports of listed banks that have been released so far, some banks have disclosed for the first time the recovery and rebate of employee performance pay.
Among them, joint-stock banks such as China Merchants Bank and Bohai Bank have disclosed relevant information. Last year, a total of 2876,5824 employees of CMB were reclaimed for performance-based pay, with a total amount of 370.1760 million yuan; <> people in Bohai Bank with a total of <>.<> million yuan of performance-based pay were recovered and deducted. In addition, city commercial banks such as Jiangxi Bank and Jiujiang Bank also disclosed relevant information.
Behind the "reverse salary bargaining" incident, the bank's performance-based pay recovery and rebate system is constantly making efforts. This move is intended to motivate employees while linking performance to risk, which to a certain extent can restrain the high-risk behaviors of executives and employees, and alleviate various operational and management risks of banks.
A number of banks' annual reports disclose the recourse of performance-based pay
As of April 4, more than half of the listed banks in China have disclosed their 16 annual reports, and the words recourse and rebate mechanism have appeared in the annual reports of many banks, including state-owned banks, joint-stock banks, city commercial banks and other types of banks.
As stated in ICBC's annual report, the remuneration of the bank's employees consists of basic compensation, performance-based compensation and welfare income.
Among them, the level of performance-based compensation depends on the bank's overall performance, the employee's organization or department and the employee's individual performance measurement results, while senior management and employees in positions with important risk impact implement a deferred payment and recourse rebate mechanism to promote the balance between risk and incentive.
"For employees who have violated rules and disciplines or have excessive exposure of risks and losses within their duties, the Bank will deduct, stop payment and recover the performance-based pay for the corresponding period according to the seriousness." ICBC said that during the reporting period, the bank carried out corresponding deduction, suspension or recourse of performance-based remuneration for employees who were disciplined or otherwise dealt with due to violations of discipline or excessive exposure of risks and losses within their duties in accordance with relevant measures.
Judging from the disclosure of this year's annual report, some listed banks have specifically disclosed the recovery of performance compensation.
Among them, CMB disclosed that 2876,5824 employees were refunded from performance-based compensation last year, with a total amount of 2.03 million yuan recovered and a per capita salary refund of 11,3 yuan. Based on the bank's total number of 2,5 employees last year, the number of employees who were required to "withdraw their salary" accounted for more than <>.<>%.
CMB has also reserved a salary risk reserve from the annual remuneration that should be allocated to the bank's employees, and the allocation of the remuneration risk reserve of its relevant personnel will be restricted in the event of a significant decline in asset quality, a significant deterioration in risk and profitability, the occurrence of major cases, or serious violations detected by regulatory authorities.
In addition, Hong Kong-listed Bohai Bank also announced the recovery and rebate of performance-based pay. A total of 370.1760 million yuan of performance pay for 5 people in the bank was recovered and deducted, with an average of nearly <>,<> yuan.
Jiujiang Bank also disclosed that the amount of performance recovery during the reporting period was 163.<> million yuan, but the report did not disclose the specific number. Jiangxi Bank disclosed the specific reasons for the deduction, indicating that the personnel responsible for the formation of non-performing assets would be identified according to the principal amount of the non-performing liability, and the corresponding performance-based remuneration would be recovered.
More than 95% of bancassurance institutions have formulated relevant systems
Behind the bank's "salary chase", the relevant mechanisms of salary deferred payment and performance-based pay recovery and rebate are continuing to make efforts.
It is understood that performance compensation is the performance remuneration and income saving remuneration paid by commercial banks to employees, mainly determined according to the results of the year's business performance assessment, and performance compensation should reflect sufficient various risks and various cost deductions and incentive constraints for sustainable development of banks.
As early as 2010, the former China Banking Regulatory Commission (CBRC) issued the Guidelines for the Supervision of Prudent Remuneration of Commercial Banks, which clarified that commercial banks should formulate provisions on deferred recovery and rebate of performance-based pay, and if the risk losses of their senior management and relevant employees within the prescribed period are exposed beyond normal, the commercial bank has the right to recover all the performance-based remuneration paid within the corresponding period and stop paying all unpaid parts.
In March 2018, the former China Banking Regulatory Commission (CBRC) issued the Guidelines for the Management of the Conduct of Employees of Banking Financial Institutions, which clarified that banking institutions should formulate a deferred recourse and rebate system for performance-based remuneration linked to the behavior of senior executives and personnel in key positions.
In October 2020, the People's Bank of China issued a notice soliciting public comments on the Law of the People's Republic of China on Commercial Banks (Draft Revision), of which Article 10 states that "commercial banks shall establish a scientific and reasonable incentive and constraint mechanism such as remuneration and performance appraisal to ensure that the salary level and structure match the Bank's long-term business performance, and establish a salary deferral payment and recourse rebate mechanism commensurate with the Bank's risk level", which is proposed to be stipulated in the form of legislation for the first time.
In August 2020, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Three-Year Action Plan for Improving Corporate Governance in the Banking and Insurance Industry (8-2020), which mentioned that at that time, the assessment mechanism of some institutions had obvious short-sighted tendencies, the salary distribution was too skewed towards the business department, the remuneration of senior executives did not match the risk responsibility they beared, the form of remuneration was too single, and the medium and long-term incentives were insufficient, which was not conducive to the sustainable development of the institution.
In March this year, the China Banking and Insurance Regulatory Commission issued a document stating that the three-year action to improve corporate governance in the banking and insurance industry has achieved obvious results. Up to now, more than 3% of institutions have developed and implemented a deferred payment and recourse rebate system for performance-based pay. The CBIRC pointed out that especially in some high-risk institutions, the relevant system has played an important role in holding offending executives accountable and recovering asset losses. For example, during the merger and reorganization of five city commercial banks in Shanxi, 95 senior executives and key positions were refunded 5.61 million yuan in performance-based compensation.
In August last year, the Ministry of Finance issued the Notice on Further Strengthening the Financial Management of State-Owned Financial Enterprises, which clearly stated that for senior executives of financial enterprises and employees in positions with direct or important impact on risks, the basic remuneration shall generally not be higher than 8% of the total remuneration, and the performance remuneration shall be deferred according to the business income and risk assessment of the business they are responsible for, and more than 35% of the performance remuneration shall be deferred payment, and the deferred payment period shall generally not be less than 40 years. Ensure that the payment period of performance-based pay matches the risk duration period of the corresponding business, and the state shall follow its provisions as otherwise stipulated.
In addition, the document requires that financial enterprises should formulate a recovery and rebate system for performance-based pay, and if senior management personnel and employees in positions with direct or important impact on risks fail to perform their duties diligently, causing major violations of laws and regulations or causing major risk losses to financial enterprises, financial enterprises should recover part or all of the performance-based remuneration paid within the corresponding period after complying with laws and regulations and performing corporate governance procedures, and stop paying part or all of the unpaid remuneration. In principle, the recovery period of performance-based pay is consistent with the period for the occurrence of the acts of the relevant responsible persons. The pay-for-performance rebate provisions apply to employees who have left or retired.