Limit execs' salaries

Ping An Insurance Chairman Ma Mingzhe made a decision in forgoing his $9.68 million pre-tax salary for 2008. His move is laudable but it, on the other hand, highlights the need to establish a reasonable payment system, says an article in 21st Century Business Herald. The following is an excerpt:

Ma's sky-high annual salary came under fire from critics last year but he demonstrated accountability by giving up his pay after his company lost heavily on its overseas investments.

But Ma's move is purely moral consciousness and has nothing to do with a reasonable payment system. Ma cut his pay, but others are giving themselves undeserved financial rewards.

Guotai Jun'an Securities, for example, handed out an annual payroll of $146,257 a person in 2008, despite the company's poor performance.

Advocating moral consciousness is necessary but so is introducing reasonable salary limits.

China should establish a performance-based reward system to regulate chief executives' payrolls.

(China Daily 03/02/2009 page2)