SOE execs paid less though covert perks remain
Updated: 2015-05-09 08:10
Smaller state-firms, which are controlled by local governments across China, have also reduced compensation for top management.
South China's Guangdong Province has rolled out a plan to cut executive salaries by 20 percent. Of the 14 listed state companies in Guangdong, eight reported year-on-year declines in executive pay. Guangdong Hongda Blasting Co, Ltd. cut its chairman's pay by more than half to 550,500 yuan a year.
In central China's Hunan Province, salaries paid to state firm chiefs is being capped at 600,000 yuan a year. Board directors at listed Tongcheng Group earned less than 250,000 yuan last year, the company's 2014 financial report shows.
Though details over pay curbs for top management at the country's largest state-firms are yet to be announced, some have already made cuts.
Both the chairman and president of China State Construction saw their salaries last year pared down by 20 percent to 865,000 yuan. The paycheck for top management at Huaneng Power International also shrank from nearly 800,000 yuan in 2013 to 652,000 last year.
SALARY ONLY PART OF INCOME
Auditors have pointed out that while firms may be trumpeting cuts to executives' basic pay, they have been much less frank about corporate-related expenditure in their financial statements.
"The salaries we are looking at are only part of a broader compensation package that hasn't been made available to the public," said Xu Guangjian,vice dean of Renmin University's School of Public Administration.
Despite growing pressure on management pay, executives at China's stated-owned banks continue to see their income rise even as profit growth slides to single digits and bad loans surge.
Remuneration for Bank of China's chairman rose 11 percent last year to 1.18 million yuan, while the bank's profit growth slowed from 12.36 percent in 2013 to 8.22 percent in 2014.
China's banking regulator has repeatedly said that executives' pay should be realigned with banks' performance.
"For many executives at state firms, whether the company they run does well or not, they know they will be paid just as much at the end of the day," said Xi Junyang, vice dean of the School of Finance at Shanghai University of Finance and Economics.