Although the companies were tight-fisted in paying dividends, they were generous to their senior executives.
Shenzhen Development Bank.
The total salaries of Shenzhen Development Bank's 24 senior executives amounted to 48.98 million yuan, up 12 percent compared with the previous year, its annual report showed. Shareholders got no dividends even though the companies' net profits went up 719 percent year-on-year.
Southwest Securities Co made a yearly net profit of 1.01 billion yuan, but it also decided not to pay dividends. Instead, salaries of the company's senior executives soared from 652,000 yuan in 2008 to 10.39 million yuan in 2009, an increase of about 10 million yuan.
Even companies with a negative performance in 2009 gave raises to their senior executives.
Yunnan Malong Industry Group Co lost 280 million yuan in net profits in 2009, down 4,229.65 percent. The company had no dividends for three years, but still increased the senior executives' salaries by 10.29 percent.
According to statistics provided by Webstock, a securities information provider, as of March 17, among the 107 companies which had no dividends for three years, 64 companies increased the salaries of their senior executives. The 102 companies had given out 246 million yuan to their senior executives as salaries, up 15.04 percent form 2008. The salaries of senior executives from all the companies which had disclosed their annual reports had a year-on-year increase of 11.49 percent.
Zhao Xijun, deputy dean of the school of finance at Renmin University of China said the disparity between dividends to the shareholders and high salaries to executives was caused by an immature management structure.
The problem was discussed during the Two Sessions. Jiang Hong, a CPPCC member, suggested transparency in the operation of State-owned assets. He said salaries were not decided by the owners of the companies, but the managers themselves.
Li Weian, professor and director of the Research Center of Corporate Governance with Nankai University, said strong measures should be taken to deal with this, such as improving the management structure, enhancing supervision and levying taxes.