China Merchants Bank’s “Another Salary Cut” Makes Headlines, Stock Price Drops Over 5%

On March 26, the news of “China Merchants Bank has cut salaries again” hit the trending list, sparking attention. After the opening on March 26, both China Merchants Bank’s A-shares and H-shares prices dropped, with intraday declines exceeding 5%. By the end of the trading day, the A-shares of China Merchants Bank closed at 42.66 yuan per share, a decrease of 5.39%.

On the evening of March 25, China Merchants Bank released its 2024 financial report. The data showed that although the bank’s net profit increased by 1.22% compared to the previous year, the per capita cost dropped to less than 600,000 yuan. As China Merchants Bank’s compensation level is typically seen as an industry benchmark, this change has attracted attention within the industry.

According to the financial report, in 2024, China Merchants Bank’s employee expenses were 68.088 billion yuan, a decrease of 3.21% year-on-year, showing a downward trend for two consecutive years. In 2022 and 2023, employee expenses were 70.657 billion yuan and 70.348 billion yuan, respectively.

At the same time, the total number of employees has increased. By the end of 2024, China Merchants Bank had a total of 117,201 employees (including dispatched personnel), an increase of 672 from the end of 2023 when it had 116,529 employees. With the increase in the number of employees, the greater decrease in total compensation expenditure led to a larger drop in per capita cost. The per capita cost in 2024 was 581,000 yuan, a decrease of 22,700 yuan compared to 603,700 yuan in 2023, a decrease of 3.8%.

As employee costs account for a large proportion of operating and administrative expenses, their decline also led to a 3.73% year-on-year decrease in overall operating and administrative expenses, amounting to 107.616 billion yuan. Among them, operating expenses saw a larger decrease of 4.61%. In 2024, the cost-to-income ratio of China Merchants Bank was 31.89%, a decrease of 1.07 percentage points compared to the previous year.

The financial report also indicated that China Merchants Bank continues to increase its investment in technology, with both the total number and proportion of technology personnel on the rise. By the end of 2024, the bank’s research and development personnel reached 10,900, accounting for 9.30% of the total employee count, an increase from 10,650 at the end of 2023, accounting for 9.14%.

China Merchants Bank stated that its compensation management follows the principles of “value-oriented, efficiency-linked, six-ability mechanism, and risk-constrained,” emphasizing the concept of “rewarding based on performance.” Meanwhile, the bank takes measures such as deducting performance-based compensation, suspension, or recovery for employees involved in violations or risk management issues, although specific figures on the number and amount recovered in 2024 were not disclosed. In 2023, China Merchants Bank recovered a total of 43.29 million yuan in performance-based compensation from 4,415 employees.

On March 26, “China Merchants Bank’s per capita salary drops below 600,000 yuan” surged to the top of Weibo’s hot search list. By the afternoon of March 26, the reading volume of this topic had reached 25.82 million. Netizens have been expressing their opinions.

User A commented, “What’s terrifying is the word ‘average,’ and after the average, it’s still over 600,000!”

User B mocked, “An average of 600,000, this destroys the harmonious atmosphere.”

User C shared, “I earn 4,000 yuan a month, less than 50,000 yuan a year, and you say an average of 600,000 is a salary cut, then what am I?”