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Salary ceiling for SOE bosses under consideration
China is mulling setting salary ceiling for the top management of the state-owned enterprises (SOE), a senior political advisor revealed in Beijing Sunday. "The State-owned Assets Supervision and Administration Commission (SASAC) is working out a plan to limit the maximum annual salary of the SOE top management, and the initial standard is likely to be set at no more than 14 times of the average salary of ordinary employees," Xu Kuangdi, vice chairman of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), was quoted as saying by the Beijing Times newspaper. Xu, former mayor of Shanghai, made the remarks at a panel discussion during the ongoing annual full session of the advisory body, in response to fellow advisors' complaints about the unfairness in China's social distribution. According to Liu Zhizhong, a senior advisor from southwest China's Chongqing Municipality, the income disparity between different sectors and even between different persons in the same unit has reached as high as 10 to 30 times. "The SASAC has taken notice of this problem and is formulating certain regulations to narrow the salary gap in the same unit," said Xu. China's state-owned enterprises make up nearly 50 percent of the country's total industrial fixed assets and receive nearly 60 percent of the domestic bank loans each year, but they contribute merely to about one third of China's annual industrial output value. Two scandals exposed late last year, in which two SOE giants, the China Reserve Cotton Management Corp. and China Aviation Oil, lost a total of more than 600 million US dollars due to poor management and adventurous market speculations, stirred up widespread public criticism on the overpaid yet incompetent and irresponsible CEOs of the SOEs. In his government work report made at the opening of the annualfull session of China's top legislature, the National People's Congress, Saturday, Premier Wen Jiabao pledged that his cabinet would continue to "deepen the reform of state-owned enterprises" as "the central link in economic restructuring." "We shall institute a system for annually assigning accountability for enterprise performance and a system for holding enterprise executives responsible for their work during their terms of service," said Wen, adding "we will standardize the system of benefit packages for these executives." Established in March 2003 as the supreme watchdog over state assets, the
SASAC and its sub-branches at various levels are overseeing the management of
150,000 SOEs with total assets worth more than 11 trillion yuan (approximately
1.32 trillion dollars). |
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