Million dollar bonuses in China
By Geoff Dyer in Shanghai
The million-dollar bonus has arrived in China’s financial services industry as local firms, buoyed by the boom in the country’s markets, compete to hire from a small pool of experienced staff.
Fierce competition has forced companies to start offering Wall Street-type compensation, especially in the fund management industry, according to industry executives, headhunters and consultants.
The surge in compensation underlines the dramatic resurgence of China’s securities and asset management companies, many of which were making large losses three years ago, just as several Wall Street firms are running into serious problems. Executives report a big rise in CVs received from US-based professionals with a China connection.
“There were several bonuses over a million dollars last year,” said Peter Alexander, head of fund management consultancy Z-Ben Advisors. “Retaining assets is no longer the top priority for the funds industry, it is getting and retaining good people.”
Although a small group of well-known dealmakers has been paid large compensation packages over the last decade, the seven-figure bonus is relatively new for most of China’s financial sector. The surge has been dramatic in the fund management industry, which has seen an explosion in assets under management from $40bn (€27bn, £20.5bn) at the start of 2005 to $450bn by the end of 2007, the result of rising share prices and massive inflows of retail money.
“I personally know of at least half a dozen managers who made more than a million dollars,” said an executive at a Shanghai-based fund management firm who asked not to be named.
China has some 60 approved asset management companies, half of which are joint ventures or have foreign shareholders. Leading firms include Harvest Fund Management, in which Deutsche Bank has a 30 per cent stake, Invesco Great Wall, a joint venture, and China Asset Management, owned by Citic Securities.