In the banking industry, China Merchants Bank has once again attracted the attention of the public with its unique management style and strict remuneration mechanism. According to a report by Nanfang, on the evening of December 28, China Merchants Bank issued an announcement on the resolution of the board of supervisors, and the meeting deliberated and passed the "Proposal on the Recourse and Clawback of China Merchants Bank's 2022 Performance Compensation". This is not an isolated case, but an industry trend. Let's dive into the reasons and implications behind this incident.
As early as 2022, China Merchants Bank disclosed in its annual report that a total of 2,876 employees' performance-based compensation was reclaimed, with a total amount of 58.24 million yuan. This decision is not unreasonable, but stems from the bank's established salary deferral and performance-based pay recourse clawback mechanism. This is a relevant mechanism established in accordance with regulatory requirements and operational management needs in order to mitigate various operational and management risks.
This mechanism is not only applicable to China Merchants Bank, and many banks have established a performance-based annual salary deferred payment or recourse to performance-based system. As shown in the annual report of Bohai Bank, in 2022, the bank will recover 17.6 million yuan in performance pay for 370 people, and about 4 yuan will be recovered per person760,000 yuan;According to the annual report of Jiujiang Bank, the total amount of performance recourse deduction of the bank during the reporting period was 1.63 million yuan. These data reveal the banking industry's rigorous approach to pay-for-performance management.
In fact, some banks have been recourse to performance for years. For example, in the 2021 and 2020 financial reports, the recourse clawback mechanism for performance-based remuneration was mentioned, but it was brief, and in 2022, the specific amount was disclosed for the first time. Among the six major state-owned banks, the Postal Savings Bank has established a system of deferred payment of annual performance-based salaries, and the other five banks have indicated that they have established a system of deferred payment of performance-based salaries and recourse clawbacks. Among the joint-stock banks, China Merchants Bank, Industrial Bank, China CITIC Bank, Ping An Bank, China Everbright Bank, Minsheng Bank and Bohai Bank have all established deferred payment and recourse clawback mechanisms for performance compensation.
The implementation of this system stems from the "Circular on Further Strengthening the Financial Management of State-Owned Financial Enterprises" issued by the Ministry of Finance last year, which requires financial enterprises to establish and improve the mechanism of deferred payment of salary distribution and accountability and salary recovery, and the provisions on the recourse and clawback of performance-based pay are applicable to those who have left their posts or retirees. For senior managers of financial enterprises and employees in positions with direct or important impact on risks, the basic salary is generally not higher than 35% of the total salary, and the performance pay shall be deferred according to the phased assessment of the business income and risk of the business for which they are responsible, and more than 40% of the performance pay shall be deferred, and the deferred payment period shall generally not be less than 3 years.
However, the implementation of this system has also raised questions and concerns from the public. Some people believe that this is the bank's reasonable management of employees, which helps to improve employees' work enthusiasm and risk awareness;Some people also believe that this is an infringement on the rights and interests of employees, and the supervision of bank salary management should be strengthened.
In any case, the incident of China Merchants Bank's reverse salary storm has brought us profound enlightenment. In the financial industry, risk management has always been the core, and the compensation mechanism is an important means of risk management. Only by establishing a scientific and reasonable remuneration mechanism can we effectively stimulate the enthusiasm of employees, improve the risk management level of the bank, and realize the steady development of the banking industry.
Behind the reverse salary storm of China Merchants Bank, we see the rigor and determination of an industry, as well as the challenges and future of an industry. Let us hope that the banking industry can make greater breakthroughs in risk management and achieve higher quality development.
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