Senior executives of China’s central state-owned enterprises (SOEs) face pay cuts of up to 30 percent as part of a reform plan spearheaded by President Xi Jinping, Caijing.com reported on Monday.
Under the plan, key executives of central SOEs and state-owned financial corporations will be slashed by around 30 percent, and their annual salary should not exceed 600,000 yuan (US$97,528), the report said, citing unnamed sources.
The reform plan, drafted by the Ministry of Human Resources and Social Security and involving other agencies such as the Ministry of Finance, is now undergoing public consultation.
The salary cuts will mainly target executives at major SOEs, in particular those in finance and banking, and will be accompanied by structural changes in their job responsibilities.
Senior government-appointed executives will monitor the company operation as a shareholder, while day-to-day operations would be handled by senior managers hired from outside at salaries in line with market levels, the report said.
Xi has vowed to reform the salary structure for high-level SOE executives. At a meeting of the Central Leading Group for Comprehensively Deepening Reforms on Aug. 18, he said unreasonably high incomes at SOEs will be adjusted.
“China will gradually regulate the income distribution system at SOEs to make salary levels appropriate and salary structures reasonable, while strictly managing and supervising the system,” the President said.
China has thousands of SOEs, 113 of which are directly administered by the country’s central authority. These enterprises are considered the backbone of the economy, but their inefficiency, monopolies in many areas, unchecked spending and corruption have long been a source of public discontent.
The average annual salary of executives at centrally administered SOEs ranged from 650,000 to 700,000 yuan in 2010 and 2011, statistics show. And the average annual salary of key officials of four policy banks have reached over 1 million yuan last year, the report said.
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