Average Chinese executive pay cheques crossed 1 million yuan for the first time in 2016
Average remuneration of the highest-paid C-suite managers rose 9 per cent last year to cross the million yuan mark, according to Deloitte’s data.
Executives at China’s publicly traded companies had a bumper year in 2016, with the average annual salary among the highest-paid C-suite managers crossing the million yuan mark for the first time, while a majority of industries received pay raises, according to a survey.
The average 2016 remuneration of the highest-paid executives rose 9 per cent to 1.02 million yuan (US$146,300) per annum among China’s publicly traded companies, according to data by the accounting firm Deloitte, in a survey of 3,100 companies on the Shanghai and Shenzhen exchanges.
Up to 80 per cent of industries surveyed reported increments for senior management, led by the hospitality and catering industries, with 37 per cent in compound annual raises over three years.
The bigger pay packets reflect the overall shortage of talent and experience among China’s executive ranks, as the labour market failed to keep pace with the country’s economic growth and development. It also indicate a buildup of latent pressure from an instruction three years ago by Chinese president Xi Jinping to cap executive salaries at state-owned enterprises.
“The remunerations at public companies reflect the trend of rising costs of talent in China,” said Jennifer Feng, the chief human resources expert at 51job.com, one of the country’s largest online jobs markets.
Employees living in urban centres saw their average annual salary increase 9 per cent last year to 67,600 yuan, according to the National Bureau of Statistics.
The banking and financial services industry had the best-paid executive ranks, with the average topping 3.6 million yuan per year, almost double the 1.9 million yuan that their peers earned in real estate, Deloitte said. Senior executives covered in the study included chairmen, presidents, general managers, chief financial officers and their deputy heads.
By comparison, the average financial industry staff earned 117,400 yuan per annum last year, an increase of 2 per cent from 2015, while non-executive real estate employees earned 65,500 yuan per annum on average, a 9 per cent raise in the same period, according to the statistics bureau.
The Chinese Communist Party, which needs to maintain a public image of austerity to reinforce its crackdown on graft and lavishness, has been capping the salaries of state-owned enterprises at least since 2009.
The president ordered executives at the country’s four largest banks, and large companies including China Mobile Ltd., to take pay cuts in 2014, singling out remuneration packages that were deemed to be unreasonably high to close the gap between the executives and other employees.
However, higher remuneration hasn’t translated into marked improvements in efficiency. Every 1 yuan invested in human resources generated 0.98 yuan in net income for publicly traded companies, according to Deloitte. That’s unchanged from 2015, and down from the 1.06 yuan of profit generated in 2014, the accounting firm said.