On the evening of December 28, China Merchants Bank (600036sh，03968.HK) issued an announcement on the resolution of the board of supervisors, stating that it had deliberated and approved the "Proposal on the Recourse and Clawback of Performance Remuneration of China Merchants Bank in 2022".
On December 1, the announcement of the resolution of the board of directors of China Merchants Bank showed that the "Proposal on the Recourse and Clawback of Performance Compensation of China Merchants Bank in 2022" had been deliberated and approved.
In its 2022 annual report released in March this year, China Merchants Bank disclosed that in order to alleviate various operational and management risks, the bank has established a mechanism for deferred payment of remuneration and recourse clawback of performance-based remuneration in accordance with regulatory requirements and operational and management needs. In 2022, 2,876 employees will be reclaimed for performance-based compensation, with a total amount of 58.24 million yuan.
In February 2021, the former General Office of the China Banking and Insurance Regulatory Commission (CBIRC) issued the Guiding Opinions on Establishing and Improving the Recourse and Clawback Mechanism for Performance-based Remuneration of Banking and Insurance Institutions (the "Guiding Opinions"), clarifying that under eight circumstances, the performance-based remuneration and other incentive remuneration of senior managers and personnel in key positions of banking and insurance institutions should be recovered. Performance-based pay clawbacks, including recovery of paid performance-based pay and cessation of unpaid performance-based compensation.
In the article "Three-year Action to Improve Corporate Governance in the Banking and Insurance Industry Achieved Remarkable Results" released on March 24 this year, the former China Banking and Insurance Regulatory Commission said that it would continue to carry out on-site inspections and evaluations of salary deferred payments. By that time, more than 95% of institutions had developed and implemented a system of deferred payment of performance-based pay and recourse clawback. Especially in some high-risk institutions, the relevant system has played an important role in holding non-compliant executives accountable and recovering asset losses.
*: The Paper.