A monthly decrease of 5000 to 10000 yuan?, Top securities firms suddenly expose rumors of salary cuts | Securities | Industry | Rumors

Rumors of salary cuts by securities firms have resurfaced.

Today, top securities firms - mid cap securities firms - reported salary cuts. According to the salary reduction plan, the monthly fixed salary of middle and low-level employees in the investment banking line of the securities firm may be reduced, with a reduction of between 5000 yuan and 10000 yuan depending on the job level.

The reporter verified with several middle and low-level employees in the investment banking business of the securities firm and learned that the above information is basically true.

An investment bank employee of the securities firm told reporters that the after tax salaries received by middle and low-level employees around him this month have been reduced by 5000 to 7000 yuan. Another investment bank employee of the securities firm stated that their salary has been paid this month, and the received salary has indeed decreased significantly, with a larger pre tax decrease. Some employees have also claimed that there has been a decrease in projects this year, so the salary reduction is relatively reasonable. Another source stated that the scope of this general reduction does not include probationary period and newly recruited employees.

There are also rumors online that the top securities firms mentioned above have implemented a general reduction in the fixed salary of employees below the MD level in the investment banking business, but it has not yet involved the bonus part; MD may adjust the bonus but has not yet lowered the basic salary. Regarding this, the reporter sought confirmation from the industry, and the interviewees all expressed uncertainty. Some also claimed that the company has not yet notified its employees of the year-end bonus.

The reporter learned that investment banks have always been one of the highest per capita income business departments of securities firms. In the second half of 2021, amidst the fierce competition for talent in the industry, some investment banks made certain adjustments to employee salaries, including adjusting the monthly fixed salary and bonus ratio, increasing the fixed salary portion, and so on. At that time, even top securities firms offered fixed monthly salaries of 38000 to 45000 yuan for fresh master's students.

"Whether the year-end bonus has been reduced or not" has sparked heated discussions

According to Securities Times, in late May, there were rumors online that over a thousand people from a large securities firm's investment banking line had cancelled the distribution of year-end bonuses. In response, the securities firm stated that the rumors were incorrect, and the company did not cancel the year-end bonus for all investment bank employees. The bonus situation varies among different employees. Last year, in order to improve employee motivation, the company adjusted and optimized the bonus distribution method, with some bonuses reflected in daily operations.

The reporter found in industry interviews that due to the overall decline in operating performance of the securities industry in 2022, many employees of both large and small securities firms have seen their year-end bonuses shrink.

A securities insider told reporters that the income of front-end business personnel at securities firms has already fluctuated greatly with different years, with huge differences between big and small years. In 2022, the overall performance of the industry declined, and the year-end bonus shrinkage was also within expectations. Some employees from top securities research institutes also told reporters that the salary reduction depends on the salary at the time of employment, and it is not ruled out that some former high-income chief executives may experience a significant reduction in their year-end bonuses.

Last year, the overall salary of securities firms decreased

The salary data released in the 2022 annual report of listed securities firms shows that the average salary per employee of each securities firm has declined to varying degrees.

In 2022, CITIC Securities, the leader of the securities industry, saw a decrease in per capita salary of 11.68%, with an average salary of 836400 yuan. CICC's per capita salary has experienced the largest decline, with a decrease of 345000 yuan compared to 2021.

It is worth noting that the impact of salary cuts is particularly evident among management. Taking CICC as an example, management compensation has decreased from 94.416 million yuan last year to 41.263 million yuan, with most management compensation showing varying degrees of decline. Among them, the annual salary of Executive Director Huang Chaohui has decreased by nearly 56%, from 7.953 million yuan to 3.484 million yuan; The annual salary of Chairman Gao Tao of the Supervisory Board decreased from 7.943 million yuan to 1.642 million yuan, a decrease of over 79.3%; The total salary of the top three executives decreased by 56.6%.

In 2022, the total salary of executives in the top three listed securities firms exceeded 10 million yuan, while 17 listed securities firms offered the same high salary in 2021.

Industry insiders say that from a business perspective, the securities industry's 2022 operating performance is under pressure due to market fluctuations, resulting in an overall decline in compensation. On the other hand, influenced by relevant policies, securities firms have lowered the average salary of employees and the total annual salary of executives, which is also a response to relevant policy documents.

According to data from the China Securities Association, in 2022, 140 securities companies achieved operating revenue of 394.973 billion yuan, a year-on-year decrease of 21.38%; Realized a net profit of 142.301 billion yuan, a year-on-year decrease of 25.54%.

Previously, multiple securities firms responded to salary cuts

The salaries of securities firms have received widespread market attention, and the salary cuts in 2022 have also raised concerns among investors about the company's declining profits and negative impact on investment. Previously, multiple securities firms have responded to salary cuts.

On April 3rd, in response to questions from investors regarding salary cuts at a performance conference, Xu Youjun, Compliance Director and Secretary of the Board of Directors of Guangfa Securities, responded that Guangfa Securities will actively adhere to the principles and requirements of implementing a prudent business philosophy, ensuring compliance bottom line requirements, promoting the formation of positive incentives, and enhancing the long-term value of the company. Guangfa Securities will establish a sound compensation system, improve the incentive and constraint mechanism for compensation, promote the stable operation and sustainable development of the company, and better assume social responsibility.

When formulating the salary system, the total salary budget will be formulated based on various factors such as the actual business situation of Guangfa Securities, compliance risk control effectiveness, its own development strategy, and long-term interests of shareholders. The salary standard will be determined by taking into account the actual situation and market level of the company, and balancing the salary income of personnel in different positions and positions.

On April 6th, China Merchants Securities stated on the investor interaction platform that it follows the dual benchmarking principle of performance target benchmarking market and salary level benchmarking market, and determines competitive salary levels based on job value, performance results, performance performance, comprehensive risk management, and compliance management implementation from multiple dimensions, achieving "performance increase, salary increase, performance decrease, and salary decrease". In addition, the company actively explores and implements a combination of short-term and medium to long-term talent incentive measures.

Previously, Zhang Youjun, Chairman of CITIC Securities, also stated at the performance briefing on March 31 that he should adhere to the principles of "business oriented, professional oriented, and ability oriented" in terms of salary, and combine immediate and long-term, short-term and long-term reward plans, so that employees can not only reflect their own role in current development, but also make more contributions to CITIC Securities' long-term development.

Several securities professionals told reporters that the reform of the compensation system in the financial industry is the trend, and the scope of the salary reduction plan will cover the entire financial industry. How to establish a scientific and reasonable compensation system requires continuous exploration by the industry.

In the view of industry insiders, the decline in securities firm salaries is caused by multiple factors. On the one hand, there is a market environment impact, leading to a decline in industry performance; On the other hand, regulatory authorities continue to call for a scientifically designed compensation system and the establishment of a long-term and short-term incentive mechanism.

In mid May last year, the Securities and Futures Commission issued the "Guidelines for Securities Companies to Establish Stable Salary Systems", which clearly stated that securities companies should establish stable salary systems and improve salary incentive and constraint mechanisms. Securities companies should formulate a total salary budget based on various factors such as actual business conditions, compliance risk control effects, their own development strategies, and long-term interests of shareholders. The salary standards should be determined based on the actual situation of the company and market level, and the salary levels of personnel in different positions and positions should be balanced.