Big banks’ CEOs receive smaller pay than small banks’
The member of the Board of Directors of a medium class joint stock bank in Hanoi said that the monthly income of a bank CEO is between VND200 million and VND350 million. However, in some cases, the pay is beyond the frame.
He said that in the banks, where the board of directors holds the real power and CEOs do not have much power, the pay could be lower. Meanwhile, the managers who hold important roles in the institutions would get higher pay, but the pay is not too big. In general, the CEO likes these are also the members of the board of directors and they are big shareholders, for whom the monthly salary is not too important to them.
A banker affirmed that the salaries of the state owned banks’ CEOs (including the equitized banks, where the State holds the controlling stakes), are much lower than the VND200 million threshold.
“Even though the bank has got equitized and now it is operating as a joint stock bank, we still have to follow the state’s wage policy. In general, we have to follow very complicated procedures to get the approval for our payroll,” he said.
“It would be a big problem if the monthly salary of our bank’s CEO is higher than that of joint stock banks. However, it would be okay if the average income of our staff is higher,” he said.
Because of the reason, the average income levels of the two equitized banks – Vietinbank and Vietcombank – were the highest in the banking system in 2011.
The monthly average income of the former bank was VND20.76 million a month, including VND20.27 million in salary. Meanwhile, Vietcombank’s figures were VND22 million and VND18 million, respectively.
Vietinbank has become well known for its highest pay level for the staff. The bank’s President Pham Huy Hung has revealed that the bank pays some excellent employees up to VND200 million a month.
Hung’s statement once surprised many other bankers, who believed that the pay level was uncommon for state owned banks, because even CEOs cannot reach the high level.
In fact, not all CEOs can receive the high income levels. Some years ago, a bank in HCM City paid VND80 million a month to its CEO, while his colleagues at small and medium banks earned VND200 million. The CEO was then called “the cutest and most romantic CEO in the banking system,” because he accepted such a modest pay level.
However, the pay level for the CEO has been raised later, after the board of directors realized the important role the CEO plays in the bank’s operation and restructure process.
Meanwhile, Deputy President of Lien Viet Post Bank Nguyen Duc Huong, said he is not surprised at all to the news that CEOs of big banks are paid less than the CEOs of smaller banks. He said that the pay level is defined based on the volume of works, and the power and the responsibility assigned to the CEOs.
Huong said that at Lien Viet Post Bank, like many other banks, the board of directors is the main operator, while CEO takes care for some certain fields.
“In the past, CEOs undertook all the works, and they got high pay. Meanwhile, in many cases, burden is put more heavily on deputy directors and members of the board of directors,” he said. “Therefore, it is quite understandable if big bank CEOs get less money than small banks.”