China Merchants Bank recently made a big news, they announced on the evening of December 28 that the board of supervisors unanimously passed a motion on the recourse clawback of performance pay in 2022. To put it simply, they want to recover some employees' performance-based pay for the past year. This is no small thing to do!
Many people may be shocked to hear this news. After all, as a well-known financial institution in China, China Merchants Bank has always shown itself to be stable and reliable. However, this time they are going to "use the knife" on their own employees, what is going on?
In fact, this so-called "performance-based pay recourse clawback system" is nothing new. Many banks have similar systems in place, mainly to restrain the behavior of employees and prevent them from ignoring long-term risks in pursuit of short-term profits. If an employee commits a major mistake or irregularity at work, the bank has the right to recover the performance-based pay they have already received.
China Merchants Bank mentioned this system in its 2022 annual report. They said that in order to reduce operational risks, they have established relevant mechanisms for deferred payment of remuneration and recourse clawback for performance-based pay. In the past year, 2,876 employees were implemented under this system, and a total of 58.24 million yuan of performance-based pay was recovered. On average, each person was recovered by 2030,000 yuan.
This may not seem like a huge number, but it is a big blow for those employees who have been clawed back their salaries. After all, they worked hard for a year, thinking they would get the pay they deserved, only to have some of their pay recovered due to some mistakes or irregularities. This kind of feeling, I'm afraid only they can understand.
However, then again, the existence of this system also has its own rationality. The financial industry itself is a high-risk, high-return industry, and practitioners often need to bear a lot of pressure and responsibility. If they make a major mistake or irregularity in their work, it will not only bring huge losses to the bank, but also pose a threat to the stability of the entire financial market. Therefore, it is also a necessary measure for banks to take measures to protect their own interests and the stability of the financial market through this system.
Of course, the implementation of this system also needs to have a certain scale and flexibility. If it is too harsh or unfair, it can cause resentment and resistance among employees, and even negatively affect the reputation and image of the bank. Therefore, banks also need to weigh and consider the actual situation when implementing this system.