Business / Policy Watch

Newspaper: Top SOE officials may have to disclose salaries

By Reuters (China Daily) Updated: 2014-11-25 08:11

Executives of China's biggest State-owned enterprises may have to publicly reveal their salaries, the Economic Information Daily reported on Monday, the latest in a series of reforms aimed at boosting corporate efficiency and transparency.

Payment disclosure, which will apply to central government-controlled SOEs - both publicly traded and private - represents Beijing's first scheme to force officials to report their income.

The newspaper said the government "will set up a payment information disclosure system" and that details on compensation "must be disclosed according to the standard of publicly listed companies". It did not explain how the disclosure system would work.

"Central SOEs' senior executives' 'invisible income' has been the most controversial gray area of SOE compensation and a focus of inquiries from the public," the newspaper said.

After the reform is implemented in January, the compensation level for executives appointed by the government will fall to seven to eight times that of an average employee, compared with 12 times the current average, the Economic Information Daily reported, citing an unnamed SOE source.

The report comes as Beijing seeks to transform executive compensation at its biggest State firms by standardizing salaries, curbing misuse of non-salary benefits and holding managers more responsible for the performance of their companies.

The first round of pay cuts, which follows the approval of central SOE reform measures by the Political Bureau of the Communist Party of China Central Committee in August, will involve 72 central SOEs and include well-known conglomerates such as PetroChina Co Ltd, China Petroleum & Chemical Corp and China Mobile Ltd, the Xinhua News Agency reported in September.

The bosses at China's biggest banks may face pay cuts of as much as 1 million yuan ($163,000), Xinhua reported last Friday.

The government is also setting up a standard non-salary compensation and supervision system, which will prohibit executives from claiming non-salary income from their firms, or bonuses from subsidiaries.

The campaign to reform SOE executives' salaries comes as the government seeks to push forward a wider national campaign against extravagance and decadence by officials and senior executives of State firms.

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