CLSA Is Giving Junior Bankers a 30% Pay Hike to Stem Exodus

(Bloomberg) -- CLSA Ltd., controlled by China’s biggest securities firm, is boosting the monthly paychecks of junior bankers by 30% on average as the Hong Kong brokerage seeks to stop defections after a two-year exodus of key staff, people familiar with the matter said.

The increase will see base pay for investment banking associates move into a range of HK$75,000 ($9,661) to HK$95,000 a month, depending on their experience, the people said, asking not to be named revealing confidential information. First-year analysts will see a bump of at least 40%, reaching about HK$40,000 to HK$60,000 a month, one of the people said.

The jump would be one of the biggest at the brokerage in recent years. Retaining talent is critical for CLSA as it tries to rebuild its franchise and win more deals. The firm has been hit by a spate of departures after its parent, Citic Securities Co., in 2019 tightened its grip and cracked down on risk and bonuses at the once freewheeling broker.

A CLSA spokeswoman declined to comment.

Even so, last year also marked a turnaround for CLSA as it swung from a loss in 2019 to generate 5.5% of the group’s profit. Citic Securities also plans to pump in more capital in the firm. The firm’s headcount fell 6% last year.

Several CLSA division heads in debt capital markets, equity derivative sales, real estate and consumer investment banking resigned after bonus payouts in early April. More than half of its fixed income sales team in Hong Kong exited earlier this year, people familiar have said. That came after most of CLSA’s top executives left the firm in 2019 and the exodus continued in 2020.

Citic Securities bought CLSA in 2013 as part of an international expansion. While it allowed a large degree of independence for many years, tension picked up in early 2019. It has since removed independent decision making, telling key managers to report directly to Beijing. It has also sought to align pay with colleagues on the mainland and last year asked a dozen senior CLSA executives to take a 10% cut in their base salaries, people said at the time.

©2021 Bloomberg L.P.