Financial Services Association, May 14 (Reporter Peng Kefeng) On the one hand, the banking industry generally cuts wages, and on the other hand, regulators are constantly emphasizing the independence of sole directors. So, should the bank's sole director's salary increase or decrease?

On May 13, Huaxia Bank released the documents of the 2023 Annual General Meeting of Shareholders. One of the proposals to adjust directors' allowance standards attracted market attention. According to the above bill, due to changes in calculation rules, the bank's sole director's allowance will probably drop to a certain extent from the level in the previous year's financial report.

On April 12, 2024, the State Council issued “Certain Opinions on Strengthening Supervision and Risk Prevention and Promoting High-Quality Development of the Capital Market”, which clearly states “effectively play the supervisory role of independent directors and strengthen performance guarantees”. This means that the sole director's responsibilities have been further expanded. Judging from public information, a number of listed companies have also recently adjusted the sole director's remuneration.

According to Wind's incomplete statistics, by the end of April, more than 50 listed companies had issued separate announcements on adjustments to the company's independent directors' allowances. In addition, more than 100 listed companies have mentioned plans to adjust independent directors' allowances in board resolutions and other announcements; the vast majority of companies are making upward adjustments.

In response, a banking analyst at a brokerage firm told the Financial Federation reporter that in the context of strong financial supervision, combined net interest spreads continue to be under pressure. Overall remuneration in the banking industry has declined by a certain margin in recent years, and salary cuts for executives are particularly obvious. Although sole directors are not bank executives, the increase in their pay may also be constrained by the industry.

“How to provide equal remuneration to sole directors is the power of bank boards of directors and other relevant institutions, and it also tests the wisdom of their management.” The person made a statement to the Financial Services Association reporter.

Bright rise and dark fall? The total salary of the sole director of Huaxia Bank may decline in 2024

Recently, Huaxia Bank released the documents of Huaxia Bank's 2023 Annual General Meeting of Shareholders. One of them is “Proposal to amend the “Huaxia Bank Co., Ltd. Director Allowance System”.

According to this document, according to the “Huaxia Bank Co., Ltd. Directors' Allowance System” (reviewed and approved by the First Extraordinary General Meeting of Shareholders in 2020 on April 21, 2020), the Bank's directors' allowance consists of three parts: labor remuneration, committee position allowance, and meeting and inspection and research allowances.

Among them, labor remuneration is 180,000 yuan/person/year; committee duty allowance is 36,000 yuan/person/year/meeting; and meeting and inspection and research grants are 12,000 yuan/time, including allowances for directors to attend shareholders' meetings, board meetings, and participate in inspections and research.

Huaxia Bank stated that it is proposed to adjust the Bank's directors' allowance standards based on the Bank's actual corporate governance and with reference to comparable industry practices, which will be implemented on January 1, 2024.

The details are as follows: 1. Labor remuneration: adjusted from 180,000 yuan per year to 280,000 yuan per year. 2. Commission position allowance: adjusted from “36,000 yuan/person/year; for those serving on multiple special committees, calculated on cumulative basis of number of positions” to “75,000 yuan/person/year; for those serving on multiple special committees, not cumulative”. 3. Cancellation of subsidies for meetings and inspections (previously 12,000 yuan/session).

After the adjustment, the directors' allowance standard is 355,000 yuan/person/year, calculated based on the actual length of time the director has served.

On the face of it, directors' labor remuneration and allowances have all been greatly increased. Furthermore, according to regulations, Huaxia Bank's executive directors and non-executive directors (excluding sole directors) do not receive allowances from the bank, and according to Huaxia Bank's 2023 financial report, the sole director's salary is generally around 390,000 yuan. Based on this initial calculation, the new standard sole proprietor's allowance has been reduced by about 9%.

Compared to the adjusted allowance standard of 355,000 yuan, this means that Huaxia Bank's sole director's salary actually “increased and declined” — according to Huaxia Bank's financial report, the total remuneration of the seven sole directors in 2023 was 2,724,000 yuan.

Currently, the Financial Services Association reporter has yet to find any public information published by other stock banks or major state-owned banks to adjust the sole director's remuneration.

Salaries of sole directors of major listed banks have been raised or lowered, and trading banks rarely drop three times in a row

According to public information, the Financial Services Association reporter's inquiry found that in 2023, the total remuneration of the sole director of Huaxia Bank achieved a certain increase compared to 2022.

According to Oriental Wealth Choice data, the total salary of Huaxia Bank's sole director was 2.16 million yuan in 2022, while in 2023 this figure increased by 560,000 yuan. Also, compared to 2021, Huaxia Bank's total remuneration for sole directors increased in 2022 and 2023.

However, according to Oriental Wealth Choice data, in 2023, the total remuneration of sole directors of several banks has declined compared to the previous year, which means that judging from the total amount, sole directors of some listed banks have already experienced salary cuts last year. Among them, the Bank of Communications achieved three consecutive declines.

However, in the past three years, more major state-owned banks have fluctuated. The salary of sole directors increased in 2023 compared to the previous year, but there are also banks that are lower than the 2021 data. According to Oriental Wealth Choice data,

The Bank of China's total salary for sole directors in 2021 is 3.05 million, total remuneration for sole directors is 2.12 million in 2022, and 2.638 million for sole directors in 2023.

Bank of Communications's total remuneration of sole directors in 2021 was 1.26 million, total remuneration of sole directors was 1.06 million in 2022, and 1.03 million in 2023, achieving a continuous decline for three years.

The total salary of the sole director of the Postbank in 2021 was 1.74 million, the total salary of the sole director was 1.39 million in 2022, and the total salary of the sole director was 1.67 million in 2023.

CCB's total salary for sole directors in 2021 was 1.95 million, total remuneration for sole directors was 2.51 million in 2022, and total remuneration of sole directors was 2.2 million in 2023.

The total salary of the sole director of the Agricultural Bank in 2021 was 1.53 million, the total salary of the sole director was 1.51 million in 2022, and the total salary of the sole director was 1.88 million in 2023.

ICBC's remuneration for sole directors in 2023 was the same as that of sole directors in 2021, all of which were 2.34 million, but there was a slight decline in sole director remuneration in 2022.

Furthermore, the situation with major stock banks is not much the same. Huaxia Bank and other stock banks saw three consecutive increases in the total remuneration of sole directors. Minsheng Bank's total remuneration last year declined the most compared to the previous year. According to Oriental Wealth Choice data,

Ping An Bank's total salary in 2022 was 840,000, but the 2023 figure was 1.55 million, but the total for 2023 is still lower than 2021.

China Merchants Bank's data for the past two years has remained the same. The remuneration of sole directors was 3 million, an increase from 2.36 million in 2021.

The total remuneration of the sole director of Everbright Bank in 2023 was 2.49 million, a slight decrease from 2.52 million in 2022, but higher than 2.38 million in 2021.

Of SPD Bank's sole director's salary in the past three years, the total remuneration in 2021 was the highest (1.42 million). In 2023, this figure was 990,000, which is still higher than the 830,000 in 2022.

Minsheng Bank's situation is that the remuneration of sole directors in 2023 dropped sharply compared to 2022. This figure was 2.58 million in 2023, 6.3 million in 2022, and 5.91 million in 2021.