CLSA Asia-Pacific Markets, the regional brokerage unit of Credit Agricole, said more than 60 per cent of its 500 regional staff took part in a voluntary plan that would see their pay cut by up to 25 per cent as the prospects for the investment banking industry continued to look grim.
About 158 Hong Kong-based staff were among those that had agreed to the salary cuts by last night, a CLSA spokesman said.
'Internally, we had set a 50 per cent cost-income ratio as the early warning signal to take a look across our cost structure,' chief executive Jonathan Slone said. 'Instead of cutting people that will affect our ability to service clients, we opted for a salary cut at the top.'
Cost to income is a measure of efficiency commonly used in the financial sector. Should the company's cost-income ratio stay at or below 50 per cent in any given month from January, employees will receive their full monthly salary for that month and a pro-rated bonus that will be paid quarterly.
Staff that agreed to the minimum 15 per cent pay cut will receive that back plus an 8 per cent bonus based on their monthly salary, while staff that took the median 20 per cent reduction will get a 17 per cent bonus. Employees that took the biggest 25 per cent pay cut will get a 25 per cent bonus based on their monthly salary.
'We've been profitable every month this year and will continue to be, so the issue is where do you want to see yourself knowing that business is going to fall? You want to have a margin for error because we haven't seen the end of this yet,' Mr Slone said.