Compensation caps for China's State-sector financial companies will be set at 2.8 million yuan (pre-tax revenue), the Economic Observer Online reported yesterday.
The Ministry of Finance has drafted a salary management circular for executives with State-sector enterprises. The annual salary of top executives would be limited within 2.8 million yuan, the online newspaper said, citing sources with an unnamed State-sector enterprise.
According to the draft, the caps of pay packages for executives are four times their annual salary, which ranges between 50,000 yuan and 700,000 yuan.
While the nation's stock investors incurred losses of around 200,000 yuan each on average in 2008, some executives in financial institutions enjoyed huge pay packages.
According to a survey by Shanghai Securities News, 44 brokerage and financial companies spent roughly 20.9 billion yuan in compensation last year, with some firms paying their staff 400,000 yuan each on average.
"The compensation caps in the US are set at $500,000, which is about five times that of a university professor's annual income. In China, the limit can be set at 500,000 yuan, since it's already five times higher than the income of a professor," said Yi Xianrong, a researcher with the financial research center under the Chinese Academy of Social Sciences, the government thinktank.
Meanwhile, the State Assets Supervision and Administration Commission (SASAC) has conducted salary self-review activities among 230,000 executives with State-owned enterprises.
Those executives are required to review their shares on hand, investment and income last year and refund their illegal shares and income. About 56 top executives in 19 companies reported 13.49 million yuan in illegal shares, Xinhua News Agency reported yesterday.
Through this review, about 6,990 people with 96 companies have cleared their illegal shares, while 338 middle-level executives with 61 companies reported 13.02 million yuan in income from part-time jobs. Most executives have refunded the income, the report said.