CICC turns screws on top bankers

China International Capital Corp (3908) is planning to demote some senior bankers and cut their pay, people with knowledge of the matter said, an unusual move that could lead to voluntary departures from one of the country's largest investment banks.

CICC has communicated to bankers internally that some individuals could lose their managing director titles and be relegated to lower ranks under a new performance-rating system that took effect recently.

Job demotions are exceedingly rare at financial institutions and large companies. Some staffers see the performance plan as a way for the bank to cut costs without making bankers redundant, as the latter would result in hefty restructuring expenses that typically come with layoffs.

It is also very difficult for companies to terminate employees in mainland China. Demotions - or the threat of them - can lead bankers to resign, which would enable the firm to reduce its headcount through attrition.

As part of the new performance-rating plan, CICC bankers will be placed into five tiers. Just 5 percent will be in the top group, 45 percent in the second tier, 20 percent in the third, 20 percent in the fourth and 10 percent in the bottom group.