Executives at SOEs face pay cut
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E-mail CRI, August 27, 2014
New reports are suggesting a salary cap of 600-thousand yuan per year may be in the works for senior executives of this country's state-owned enterprises.
That's around 100-thousand US dollars.
The reports have not been confirmed by the government.
This comes on the heels of Chinese President Xi Jinping suggesting last week that corporate salaries in this country's SOE's need to be reformed.
Li Jin, chief researcher with the China Enterprise Institute, says any cuts to salaries need to be tempered.
"We need to find that fine balance. If we cut their salaries so low, it will hurt their motivation and it hurts the basic incentive mechanism of running a company. But we should also consider the income level of other state employees such as civil servants. I think there has to be a clear definition of an executive’s job responsibility and how much of it is related to revenue creation for the company."
It’s being reported certain executives with this country's centrally-administered State-Owned Enterprises are earning upward of 10-million yuan per year through salaries and bonuses.
That number is about ten times or more of the average salary of an ordinary SOE employee.
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