State lenders, insurers face pay caps

China is set to impose a 1 million yuan (HK$1.07 million) cap on the annual income of staff at central government-owned financial institutions, three sources said.

Those whose income already exceeds 1 million yuan will have their payout cut, with middle and senior managers seeing incomes slashed severely in an overhaul of the compensation structure at 27 financial giants including the "Big Five" banks, six leading insurers and four major bad debt managers. The bulk of cuts will be made by shrinking bonuses, said two of the sources.

The most sweeping wage reductions in the US$67 trillion (HK$522.6 trillion) finance sector will begin as early as next month, they said.

The cap is in line with the China's "common prosperity" drive, launched in 2021 to address social and income inequality amid slowing growth.

Some senior executives currently earn as much as 5 million yuan.

REUTERS