This year, Peter Ma., the chairman of China's second largest life insurer, Ping An Insurance, became the target of thousands of angry Chinese, after the company revealed he earned Rmb66.16m ($9.0m) in 2007, nearly three times his pay in 2006.
Although his 2007 salary included a Rmb20m bonus, the news that his total compensation was more than that of HSBC chairman, Stephen Green, drew heavy criticism in China, where many people struggle to make ends meet.
In April, more than 90 per cent of users on Sina.com, the country's leading Dews portal, said they disagreed with executive pay practice at Ping An.
Many enraged respondents said executives in the financial services industry were simply paid more than they deserved.
But as China's financial companies struggle to retain and attract experienced people from a small pool of talent, they find they simply have to offer compensation at Wall Street levels.
Multinationals frequently complain that, as a result of rapid growth of the Chinese economy and increasing foreign investment, hiring and retaining staff is their biggest problem, ahead of unclear regulations and bureaucracy.
According to research this year by the American Chamber of Commerce in China, more than 70 per cent of companies say difficulty attracting, developing and retaining managers and professionals is having a negative impact on their Chinese operations.
Staff shortages are especially acute in the financial services sector because of its relative youth. University graduates are plentiful but competition for experienced people who understand the industry, and its increasingly complex products, is keen.
Many companies have poached from rivals. Ping An, for example, has hired two-thirds of its top 100 senior mangers from multinationals.
"The industry didn't exist five or six years ago. From a talent perspective, it is difficult. You don't have many people who are trained," says Andrew Chang, associate director at Michael Page, the recruitment consultancy, in Beijing.
Finance professionals in China are seeing the highest salary inflation in Asia, as demand heavily outweighs supply. According to Michael Page, salaries in the industry are expected to rise by as much as 20 per cent across the board, over the 12-month period from October 2007, and by up to 30 per cent for jobs that demand rarer skills.
China is also experiencing an increasing number of mergers and acquisitions, as companies buy rivals to expand. This surge in activity is creating strong demand for people with experience in due diligence, compliance and deal-making, says Cherol Cheuk, director of banking and finance at Hudson, the recruitment agency.
"When hiring senior in-house lawyers, banks don't even give a [salary] range," she says.
As companies try to retain staff in the face of high turnover -- estimated to be as high as 30 per cent in many fund management companies -- million-dollar bonuses have arrived.
According to recruiters, last year, bankers received bonuses worth up to five times their annual basic salary, in some cases more. Even back-office staff at investment banks took home about three to six months of pay in bonuses.
In spite of these healthy salaries, companies continue to face hiring pressure, as their businesses expand. Some have looked to transfer Mandarin-speaking staff from other offices in Asia.
Returnees who have worked abroad also make for popular hires. "They speak the language, know the culture and have the product knowledge," says Mr Chang.
Foreign expatriate workers, meanwhile, are not as common.
"I think it has to do with language and living standards. Expats usually have families, so some are worried about education," says Ms Cheuk.
The fierce battle for talent is expected to intensify, as foreign companies look to expand into China.
Strict regulations that have made it hard for international financial service businesses to operate in China are also expected to be relaxed, eventually.
"I see an increase in demand, rather than a decrease," says Mr Chang of Michael Page.
As competition for experienced people is set to become even more intense, increasing numbers of companies have decided to develop their own talent pools.
PwC, the professional services firm, launched a worldwide programme to recruit overseas Chinese with international experiences late last year.
The initiative aims to attract both graduates and experienced staff. The firm has placed four managers in London, New York, Los Angeles and Sydney to work with top universities, such as the London School of Economics and Political Science, the University of California, Berkeley and New York University. The aim is to lure Chinese graduates home.
"You don't hire graduates for your need in the next 12 months. You are hiring the mangers they will become in five years. We are taking a long-term view," says Dave McCann, a human resources partner at PwC in Beijing.
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Under syndication
arrangement with FE
