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90% back limits on executive pay
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An online survey carried out by China Youth Daily showed 90 percent of people back government moves to restrict pay rises for senior executives in state-owned enterprises.

90.5 percent of those polled said they support the recent order by the Ministry of Finance to set limits on pay rises of senior executives in state owned enterprises, according to an online survey carried out by China Youth Daily. But only 38.9 percent of people thought the order reflected the determination of the government to deal with the global financial crisis.

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Beijing resident Chen Damin said, "Executive pay should depend on how well they run their companies. If they make decisions that lead to losses they should take the consequences."

Mao Shoulong, vice dean of the Public Policy Institute at Renmin University, thought that the government's move to limit executive pay was made in response to public opinion. But people also wanted company accounts to be opened for inspection. The survey showed 65 percent want firms to fully disclose details of executive pay. Another 45 percent said the government should introduce further reforms to the income distribution system.

On January 20 the Shanghai city government announced that nine state-owned companies in Shanghai were cutting both the salaries of top executives and business travel expenses.

91 percent of those surveyed said the Shanghai move should be extended to the rest of the country. One net user said "If the bosses of state-owned enterprises volunteered for pay cuts, society would pull together to overcome the crisis."

Su Hainan, chairman of the Remuneration Committee of the China Association for Labor Studies, said, "The government should not just limit the pay of senior executives, but also restrict their power to set salary levels. Some senior executives award themselves bonuses without reference to boards of directors. And some receive allowances and other hidden benefits in addition to their salary."

The survey showed that 46 percent of people agree with Su that the move to limit pay will not solve the fundamental problem, but say it should be implemented as an interim measure during the current crisis.

(China.org.cn by Ma Yujia, February 18, 2009)

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