Future professional managers of state-owned enterprises (SOEs) would "very likely" be paid more than their government-appointed bosses, a senior official said yesterday as details emerged of an overhaul of pay packages for chiefs of state firms.
The admission came as state television revealed that more than 200 top executives from 72 leading SOEs would be affected by reform of their pay and perks.
People's Daily quoted Qiu Xiaoping, vice-minister of human resources and social security, as saying that most state-appointed executives would have pay cuts, "some of them substantial".
The Politburo on Friday approved the pay reform of executives at central-government-administered enterprises. But details of the reform were only revealed in a China Central Television programme late on Tuesday and the People's Daily report yesterday.
Qiu said that under the pay reform, the gap between state enterprise executives and their junior colleagues would not exceed that of recent years - roughly 13 times the average salary of ordinary staff.
He also confirmed that in future, state corporate management would comprise both government-appointed representatives as well as managers picked by company directors based on operational needs.
The South China Morning Post reported last month that the government would introduce a two-step reform to overhaul executive salaries at state firms, starting with pay cuts of up to 50 per cent, followed by the recruitment of professional managers at market-rate salary packages.
Qiu said the pay structure of state enterprise executives would be changed to include gratuities on top of an existing base salary and an annual performance-based bonus. These gratuities would be tied to performance throughout a chief's tenure.
The pay reform will affect state firms' chairmen, party secretaries, chief executives and supervisory board chairmen, as well as the executives' deputies.
Perks and privileges would be cut as well, according to Xu Fushun, deputy minister of the State-Owned Assets Supervision and Administration Commission, People's Daily reported.
But Liu Shengjun, deputy director of CEIBS Lujiazui International Finance Research Centre, said simply cutting pay and perks would not end corruption. "The ultimate solution is to break the administrative monopoly, which is the breeding ground of corruption," Liu said.