BEIJING • The chairmen and presidents of China's five biggest banks saw their 2015 compensation slashed by a record 50 per cent, the lenders' annual reports showed, after Beijing-mandated pay reforms for executives of state-owned firms were implemented last year.
Mr Jiang Jianqing, chairman of the Industrial and Commercial Bank of China (ICBC), the world's biggest lender by assets, received less than 550,000 yuan (S$115,400) in compensation last year, down 52 per cent from 1.1 million yuan in 2014, the bank's annual report shows.
That was only 0.3 per cent of the US$27 million (S$36.6 million) received by JPMorgan Chase CEO Jamie Dimon last year. It was also a fraction of the 14.3 million Swiss francs (S$20.2 million) that UBS CEO Sergio Ermotti received.
The hefty pay cuts came as China's weak economy pressured lenders' profits. China's big banks last month reported their weakest profit growth in a decade, with interest margins shrinking in the face of interest rate cuts, and non-performing loans at a 10-year high.
Beijing is aiming to transform executive compensation at its biggest state firms by cutting salaries, curbing misuse of non-salary benefits and holding managers responsible for the performance of their firms, as part of the government's state- owned enterprise reform efforts.
Under the plan, top bosses at 72 central government-owned firms, which includes well-known conglomerates such as PetroChina, Sinopec and China Mobile, face pay cuts of up to 50 per cent.
China Construction Bank, the country's second-biggest lender, slashed chairman Wang Hongzhang's compensation to less than 600,000 yuan last year, from 1.2 million yuan in 2014, the bank's annual report showed.
The chairmen at three other major state lenders - the Agricultural Bank of China, Bank of China and Bank of Communications - also pocketed only half of what they earned in 2014, their annual reports showed.
The lenders' presidents also saw their compensation halved.
Meanwhile, China's banking regulator yesterday said lenders should tighten risk controls in their overseas branches, after some of the top banks came under foreign scrutiny for alleged compliance failings.
Banks should clarify the responsibilities of staff in overseas branches, strengthen risk judgment and ensure adequate checks on clients, the China Banking Regulatory Commission said on its website. "Banking institutions should strictly follow 'know your customer' requirements... They should not fully rely on third-party or borrowers to provide information," it said.
In February, Spanish police arrested five directors of ICBC as part of a probe into money laundering at its Madrid branch. Last month, the Bank of China said it is considering all its options in an Italian case in which it is alleged that billions of euros of illicit earnings were laundered via its Milan branch.