Mainland investors who are grappling with a slumping stock market have expressed concern over what they fear is "an enemy within", after seeing details of executive pay that spurred an uproar over corporate governance.
The mainland's stock market has been mired in a bearish mood for the past three years, with most investors venting their anger on a flurry of initial public offerings that soaked up massive funds from existing holdings.
"IPOs were seen as one of the main reasons for the market's fall. But it might be the nasty bosses of the companies that stopped us from making money," said Liu Zhiming, a retail investor. "If you look at their salaries, you will totally lose confidence."
According to data provider iFind, senior executives of mainland-listed firms gained an average 6.9 per cent pay rise last year and their total payments were valued at about 9 billion yuan (HK$11.3 billion). The growth in salaries of company bosses far exceeded a 2 per cent profit rise recorded in the same year.
"Investors have reason to protest against the pay rises," said West China Securities trader Wei Wei.
Nearly 70 per cent of listed firms raised the salaries paid to the senior executives, according to iFind.
On the mainland's arcane stock market, retail investors normally pin their hopes on government support measures such as reductions in stock-trading taxes that could drive the indicators up. Most of them thought that the suspension of listings since October would lead to a strong rally, only to find that the main gauges have remained flat this year.
Yao Gang, a vice-chairman of the China Securities Regulatory Commission, told a work conference last week that new public offerings would restart next month, sending a chill down the spines of retail investors. The news knocked the Shanghai Composite Index down 4.1 per cent for the week.
The CSRC then made a U-turn on Friday, saying it had yet to work out a timetable for the relaunch, in an apparent effort to soothe disappointed investors.
Investors clearly remain concerned that new equity issues will drain liquidity out of the market, and analysts said there was a deep-rooted problem in the usage of listing proceeds.
"If the founders and the management use part of the proceeds to increase their salaries without trying their best to improve the company's earnings, investors will always be the losers," said He Fuqiang, a director of ZHY Money & Bond Market Investment Consulting Centre.
Former CSRC chairman Guo Shuqing was a strong advocate for increasing cash dividend payouts to retail investors.
In March, Xiao Gang, a former Bank of China chairman, replaced Guo as CSRC chairman. Xiao has kept tight-lipped on policy directions since taking the helm.