On December 28, China Merchants Bank issued an announcement on the resolution of the board of supervisors, stating that the meeting deliberated and passed the "Proposal on the Recourse and Clawback of China Merchants Bank's 2022 Performance Compensation".
The time goes back to the 2022 annual report of China Merchants Bank, which was disclosed in March this year. According to the annual report, in order to alleviate various operational and management risks, the bank has established relevant mechanisms for deferred payment of remuneration and recourse and 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. This means that the average "salary refund" per person is 20,300 yuan, and the number of employees who are required to "return salary" accounts for more than 2.5% of all employees of China Merchants Bank.
As early as 2010, the former China Banking Regulatory Commission (CBRC) issued the Guidelines for the Supervision of Sound Remuneration for Commercial Banks, which clarified that commercial banks should formulate provisions on deferred recourse and clawback of performance-based remuneration, and if the risk losses of their senior managers and relevant employees within the prescribed period are excessively exposed, commercial banks have the right to recover all the performance-based remuneration that has been paid within the corresponding period and stop paying all the unpaid part.
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 as of that time, more than 95% of institutions had formulated and implemented a performance-based pay deferred payment and recourse clawback system. Especially in some high-risk institutions, the relevant system has played an important role in holding non-compliant executives accountable and recovering asset losses.
On the whole, the main goal is to prevent the occurrence of imprudent behavior of banking employees due to improper incentives or excessive incentives and insufficient risk-related linkage.
Summary of listed companies in the banking industry
Since the development of the banking industry in the mainland, the total assets of many banks have exceeded one trillion yuan, while the total assets of state-owned commercial banks have exceeded 10 trillion yuan. According to the scale of total assets, the listed companies in the banking industry are divided into three echelons, which are more than 10 trillion yuan in total assets, between 1 and 10 trillion yuan and below 1 trillion yuan. At present, the banks with a scale of more than 10 trillion yuan are 6 state-owned commercial banks; There are 9 listed joint-stock banks and 3 urban commercial banks with a scale of 1-10 trillion yuan, and 19 urban commercial banks and rural commercial banks with a scale of less than 1 trillion yuan.
Comparison of individual business and corporate business performance of listed companies in the banking industry
As of the third quarter of 2022, the retail business and corporate business income of the above four companies exceeded 100 billion yuan, while the Postal Savings Bank focused on retail business, with its retail business income exceeding 100 billion yuan, while the corporate business income was only 20% of the retail business. Among the joint-stock banks, the performance of China Merchants Bank, Ping An Bank and China CITIC Bank is more prominent among the joint-stock banks.
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