Senior Officials at Chinese Financial Firms Facing Pay-cut
[2009-02-18 10:49:30]
China is drafting a serious regulation to cap the income of the senior executives at state-owned or state share-holding financial institutions that have raised heated controversy nationwide over their surprisingly sky rocketing annual salaries amid a global economic downturn.
The move is seen as a follow up to pay-cut attempts by foreign governments targeting financial sectors that were hard hit by the current recession.
The Shanghai-based National Business Daily quoted an insider with the Ministry of Human Resources and Social Security, the country's top wage regulator, as reporting that the drafting has neared completion and that the rules will be put into effect within the year after they are approved by the State Council.
Earlier reports said the new salary limit will likely withhold the senior executives' annual earnings within the ceiling of 2.8 million yuan, or about 400,000 US dollars.
However, Su Hainan, director of a wage research institution under the Ministry of Human Resources and Social Security said the final sum will be lower than the reported level that still seemed overly high regarding the capacities and contributions of the executives.
Su said the upcoming new regulation will keep the companies' directors away from setting up salary quotas themselves, a common phenomenon in Chinese listed enterprises that has been blamed for the irresponsibly sky-high wages of some senior executives.
The sky rocketing salaries of senior officials at domestic financial corporations have triggered heated dispute in recent years. The pre-tax salary of Ma Mingzhe, President and Chief Executive Officer of China Ping An, increased 394 percent to 66 million yuan in 2007, although his company's shares plummeted from a peak of nearly 150 yuan in October 2007 to 50 yuan in April 2008.
Su Hainan added that the new regulation will also aim to avoid income disparity between executives and ordinary employees in the country.
US President Barack Obama last week announced a 500,000 US dollar annual salary cap for senior executives on Wall Street, while the European Union has said it will adopt a similar measure in its area.
The move is seen as a follow up to pay-cut attempts by foreign governments targeting financial sectors that were hard hit by the current recession.
The Shanghai-based National Business Daily quoted an insider with the Ministry of Human Resources and Social Security, the country's top wage regulator, as reporting that the drafting has neared completion and that the rules will be put into effect within the year after they are approved by the State Council.
Earlier reports said the new salary limit will likely withhold the senior executives' annual earnings within the ceiling of 2.8 million yuan, or about 400,000 US dollars.
However, Su Hainan, director of a wage research institution under the Ministry of Human Resources and Social Security said the final sum will be lower than the reported level that still seemed overly high regarding the capacities and contributions of the executives.
Su said the upcoming new regulation will keep the companies' directors away from setting up salary quotas themselves, a common phenomenon in Chinese listed enterprises that has been blamed for the irresponsibly sky-high wages of some senior executives.
The sky rocketing salaries of senior officials at domestic financial corporations have triggered heated dispute in recent years. The pre-tax salary of Ma Mingzhe, President and Chief Executive Officer of China Ping An, increased 394 percent to 66 million yuan in 2007, although his company's shares plummeted from a peak of nearly 150 yuan in October 2007 to 50 yuan in April 2008.
Su Hainan added that the new regulation will also aim to avoid income disparity between executives and ordinary employees in the country.
US President Barack Obama last week announced a 500,000 US dollar annual salary cap for senior executives on Wall Street, while the European Union has said it will adopt a similar measure in its area.
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