A man walks in front of windows showing a view of the skyline of Hong Kong on July 21, 2020. ANTHONY WALLACE/AFP via Getty Images
Several large Chinese state-backed financial firms operating in Hong Kong are instituting a controversial policy requiring employees to return portions of their bonuses, a move aligned with President Xi Jinping's 'common prosperity' plan.
According to SCMP, this measure, which has affected executives and former staff at companies like China Everbright Group and China Huarong International Holdings, involves clawing back less than 10% of past bonuses.
At the same time, China Merchants Group has told its top staff in China to give up bonuses they were promised for later and sometimes return money they were paid in earlier years to meet a salary limit of 2.9 million yuan (about $400,000) before taxes.
Other financial companies, like mutual fund managers and banks, also set limits on how much they pay and reduce extra benefits.
The International Institute for Strategic Studies referred to the Common Prosperity plan as an economic and social initiative introduced by Chinese President Xi Jinping aimed at reducing income inequality and promoting more equitable wealth distribution across China.
Launched in 2021, the plan targets various sectors, including technology, finance, and real estate, with policies designed to boost social welfare, improve access to education and healthcare, and support low-income groups.
Companies nationwide have responded by reducing salaries and requiring employees to return portions of their previous earnings that were deemed too high.
While it aims to curb excessive wealth accumulation and promoting a more balanced development approach to ensure sustainable and inclusive growth, the initiative has led to measures such as increased taxation on high-income individuals and stricter regulations on sectors perceived as contributing to wealth disparity.
Top-earning finance professionals, previously criticized by Beijing for their extravagant lifestyles, are among those most affected by efforts to redistribute wealth and stabilize China's economy, the second-largest globally.
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