Skip to main content

China sets guidelines on bank bonuses

STORY HIGHLIGHTS
  • At least 40 percent of executive bonuses to be deferred three years
  • Banks can withhold bonuses if executives perform poorly
  • Bonus criteria to be based on range of factors, such as performance
  • Bonuses limited to no more than three times annual base salary

Beijing, China (CNN) -- China's banking regulator has issued guidelines linking bonus pay of bank executives and employees to performance, according to state media.

The guideline would require at least 40 percent of executive bonuses to be deferred for at least three years, the Xinhua news agency reported. Banks could then hold back money from the retained bonuses if executives perform poorly.

The criteria for bonuses would be based on a range of factors, such as a bank's business performance, social responsibility and risk management, which includes bad loans.

The guidelines issued Wednesday would also limit an executive's bonus to no more than three times their annual base salary.

For rank-and-file employees, bonuses could not exceed 35 percent of base pay.