(Bloomberg) -- Citic Securities Co., one of China’s top investment banks, is slashing basic salaries by up to 15% for some bankers to comply with President Xi Jinping’s “common prosperity” campaign, according to people familiar with the matter.
The Beijing-based brokerage notified its bankers this week of the reduction, said the people, who asked not to be identified discussing internal information. Citic has yet to notify employees of their bonuses after a tough 2022 that saw its profits drop by 8%, the people said.
Rival China International Capital Corp. last month cut senior banker compensation, which also included bonuses, by more than 40%, signaling brokers are falling in line with Xi’s push to corral pay for the nation’s elite. Authorities have lashed out at the “hedonistic” lifestyle of bankers and warned them to abandon pretensions of being the “financial elite.”
Representatives of Citic Securities didn’t immediately respond to an emailed request for comment. The salary reductions were earlier reported by Reuters.
Businesses have been hard hit in China by a regulatory crackdown and the nation’s now abandoned pursuit of Covid Zero. China’s 140 brokerages posted a combined 26% decline in profits last year, according to official data.
Top bankers in Asia at major Wall Street firms have also seen deep cuts. On average, managing directors at banks including Goldman Sachs, Morgan Stanley and Bank of America Corp. saw their total compensation drop by 40% to 50%, people familiar with the matter said earlier.
--With assistance from Amanda Wang.
©2023 Bloomberg L.P.