Beijing is considering widening a proposed ceiling on compensation for executives at financial firms to other state-owned enterprises (SOEs) amid calls for such an austerity measure to prevent potential social discontent in an economic downturn.
Yin Weimin, the Deputy Minister of Human Resources and Social Security, told a forum in Beijing yesterday that his ministry was working on revising the country's old regulation on remuneration at state-owned firms, Xinhua reported.
The move would aim at 'pegging corporate executive pay to a reasonable multiple level of grass-roots employee income', it said.
The existing rule only governs the allocation of bonus and basic salary as well as the payment method but there is no limit on the amount.
Last week, news emerged that authorities had proposed a pay ceiling for top managers at state-controlled financial institutions of 2.8 million (HK$3.18 million) yuan a year. Mr Yin did not specify any 'multiple level' numbers but the National Business Daily reported yesterday that the acceptable remuneration for an SOE manager should not exceed 12 times that of a grass-roots worker.
A widening income gap and falling profits have recently fuelled criticism that most mainland SOE executives are overpaid.
