Chinese investment banks have awarded pay rises to their staff for the first time since the 2008/09 global financial crisis, buoyed by a surge in China-related deals, but salaries and bonuses still trail far behind those paid by Western banks, according to research published by a global professional services firm.

China's investment houses traditionally baulk at paying outsized salaries, though some are just as profitable as Wall Street rivals, said officials at Towers Watson & Co, and they were especially frugal in the lean years after the crisis - but this year's boom has finally loosened their purse strings.

"This is the first time since 2009 we have seen an increase of base and total compensation," said Maggy Fang, its managing director for executive compensation in Asia Pacific.

The investment banks have raised bonus payouts by an average of 12 percent this year, while base salaries for the sector rose by about 6.5 percent, according to Towers Watson.

Compensation levels rose 9.2 percent in 2014, and bonuses are expected to rise again in 2015, said Fang, though she did not give a figure.

But the pay levels have a long way to go to catch up to those at international firms. Chinese banks pay around half as much as their Wall Street rivals in terms of base salary, said headhunters.

Even top Chinese banking roles pay considerably less compared with global firms.

Jiang Jianqing, chairman of Industrial & Commercial Bank of China Ltd, for instance, takes home around $326,000 in salary, bonus and benefits, according to the bank's 2013 annual report, while a managing director at a Western investment bank in Hong Kong can expect to make up to $450,000 in base salary alone.

Still, the bump in Chinese pay marks a turnaround for a sector that has seen total compensation fall heavily over the past four years, according to Christian Brun, a founding partner at executive recruiting firm Wellesley Partners in Hong Kong.

Despite a slowdown in the Chinese economy, investment banking business has been booming. China-related deals in equity capital markets surged 69 percent in the first 11 months of the year compared with the same period in 2013, while M&A deals jumped 77 percent.

Chinese banking culture is typically more conservative when it comes to pay, and there are restrictions on the use of stock incentive plans.

(China Daily USA 12/26/2014 page18)