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SOEs in financial sector to curb executive pay

(Xinhua)
Updated: 2009-01-27 09:33

State-owned enterprises (SOEs) and state-held companies in the financial sector should keep management salaries at a "reasonable" level, the Ministry of Finance said in a notice released Monday.

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The notice said the goal was to avoid huge gaps between such salaries and those of lower-level employees in such organizations, as well as the general public.

The MOF notice also urged those organizations to suspend stock option incentives and employee stock ownership plans during the global financial crisis. The plans will be suspended until the government releases specific policies regulating such activity, said the MOF.

Most foreign financial companies have reined in management compensation in response to the crisis, and some domestic financial SOEs have already done the same for 2009, said the MOF.

The MOF also asked the companies to monitor the business expenses of senior management.

SOEs and state-held companies should draft plans in response to the notice and report them to local governments by Jan 31, said the MOF.

In December, China Insurance Regulatory Commission issued similar instructions.

Both policies followed media reports claiming that China's financial SOEs were paying annual salaries of more than 10 million yuan ($1.4 million) to top managers.