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China to cut SOE executive salaries by 70%: media

(Ecns.cn) Updated: 2014-08-26 15:29

China will cut the salaries of top executives at State-owned enterprises (SOEs) by as much as 70 percent in a move to regulate excessively high payments and bonuses, Caijing reports.

The central government has drafted a plan based on salary reform that would cut SOE executive earnings by up to 70 percent to no more than 600,000 yuan ($100,000) annually.

Executives at financial SOEs will be hit hardest as they usually enjoy the highest incomes.

Statistics show that in 2011, executives at SOEs pocketed annual salaries of 720,000 yuan ($116,000) on average, while those at China's Big Four state banks (China Industrial and Commercial Bank, China Construction Bank, China Agricultural Bank and Bank of China) earned an average of over one million yuan ($160,000).

It has long been deemed controversial for top SOE executives to receive hefty incomes while enjoying privileges identical to ranked officials. President Xi Jinping said during a meeting last week that China would standardize income distribution so that payments are reasonable, structured and efficiently supervised.

Such reform would re-introduce a share incentive mechanism for financial SOE employees, which had been placed on hold for nearly five years.

China to cut SOE executive salaries by 70%: media China to cut SOE executive salaries by 70%: media
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