SOE reforms to cut executives' pay and perks in China

Chinese State-owned enterprises’ managers are getting paycuts, and investors¹ are monitoring the pilot pay reform program because SOEs are usually blue chip stocks.

 

Central State-owned enterprises launched a pilot pay reform at the beginning of this year. Soon the program will be implemented² for SOEs nationwide.

 

The salary system for SOE executives has long been criticized for lacking transparency and not reflecting the performance of executives. 

 

Some executives have gone away with their pockets full even when the SOEs they are  managing have gone bankrupt.

 

"We designed an indicator³ to measure each SOE executives’ performances. We consider the difficulty of managing a specific SOE in China based on the competitiveness of the industry and the scale and profitability of the firm. SOE executives' salaries are based on their indicators," said Qiu Xiaoping, vice⁴ minister of Ministry⁵ of HR and Social Security.

 

The top managers' salaries in SOEs covered by the reform will be determined⁶ by the board under a uniform standard instead of being overseen⁷ by different government departments.

 

"At central-administered State-owned firms, many of the executives enjoy too many benefits. Now we put restrictive rules to only allow them to have basic pension and healthcare insurance packages," Qiu said.

 

The regulation stipulates⁸ that a manager's basic salary will be two times the average salary of an enterprise's employee, and will be performance-based. They will take into account the industry conditions and the company's revenue and profit. 

 

The reform is also about disclosure: SOE managers' salaries will be made public to avoid hidden incomes. The regulation states that SOE executives who hold part-time posts in the company's affiliates⁹ should not be compensated¹⁰ financially and that retired¹¹ executives should not continue to receive salaries from the companies they used to work for.

 

"We will put the disclosure of SOE executves' income into companies' information disclosure routine. Companies' boards of directors and shareholders¹² should also play a supervising role in the process," Qiu said. 

 

To date, 72 SOEs, roughly half of central SOEs, are subject to the new salary policy. Central SOEs, such as energy giant PetroChina and mobile carrier China Mobile are some of China's largest and most powerful companies.

 

The reforms will have wide-ranging ramifications¹³ across the economy. 

 

1 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

2 implemented   

v.实现( implement的过去式和过去分词 )；执行；贯彻；使生效

参考例句：

• This agreement, if not implemented, is a mere scrap of paper. 这个协定如不执行只不过是一纸空文。 来自《现代汉英综合大词典》
• The economy is in danger of collapse unless far-reaching reforms are implemented. 如果不实施影响深远的改革，经济就面临崩溃的危险。 来自辞典例句

3 indicator   

n.指标；指示物，指示者；指示器

参考例句：

• Gold prices are often seen as an indicator of inflation.黃金价格常常被看作是通货膨胀的指标。
• His left-hand indicator is flashing.他左手边的转向灯正在闪亮。

4 vice   

n.坏事；恶习；[pl.]台钳，老虎钳；adj.副的

参考例句：

• He guarded himself against vice.他避免染上坏习惯。
• They are sunk in the depth of vice.他们堕入了罪恶的深渊。

5 ministry   

n.(政府的)部；牧师

参考例句：

• They sent a deputation to the ministry to complain.他们派了一个代表团到部里投诉。
• We probed the Air Ministry statements.我们调查了空军部的记录。

6 determined   

adj.坚定的；有决心的

参考例句：

• I have determined on going to Tibet after graduation.我已决定毕业后去西藏。
• He determined to view the rooms behind the office.他决定查看一下办公室后面的房间。

7 overseen   

v.监督，监视( oversee的过去分词 )

参考例句：

• He was overseen stealing the letters. 他被人撞见在偷信件。 来自辞典例句
• It will be overseen by ThomasLi, director of IBM China Research Laboratory. 该实验室由IBM中国研究院院长李实恭(ThomasLi)引导。 来自互联网

8 stipulates   

n.（尤指在协议或建议中）规定，约定，讲明（条件等）( stipulate的名词复数 )；规定，明确要求v.（尤指在协议或建议中）规定，约定，讲明（条件等）( stipulate的第三人称单数 )；规定，明确要求

参考例句：

• The trade contract stipulates for the settlement of balances in RMB. 贸易合同规定余额以人民币结算。 来自《现代汉英综合大词典》
• The contract stipulates for the use of seasoned timber. 合同上订明用干透的木料。 来自辞典例句

9 affiliates   

附属企业( affiliate的名词复数 )

参考例句：

• She affiliates with an academic society. 她是某学术团体的成员。
• For example, these security affiliates participated in the floating of 19,000,000,000 of issues in 1927. 例如，这些证券发行机构在1927年的流通证券中，就提供了一百九十亿美元的证券。

10 compensated   

补偿，报酬( compensate的过去式和过去分词 )； 给（某人）赔偿（或赔款）

参考例句：

• The marvelous acting compensated for the play's weak script. 本剧的精彩表演弥补了剧本的不足。
• I compensated his loss with money. 我赔偿他经济损失。

11 retired   

adj.隐退的，退休的，退役的

参考例句：

• The old man retired to the country for rest.这位老人下乡休息去了。
• Many retired people take up gardening as a hobby.许多退休的人都以从事园艺为嗜好。

12 shareholders   

n.股东( shareholder的名词复数 )

参考例句：

• The meeting was attended by 90% of shareholders. 90%的股东出席了会议。
• the company's fiduciary duty to its shareholders 公司对股东负有的受托责任

13 ramifications   

n.结果，后果( ramification的名词复数 )

参考例句：

• These changes are bound to have widespread social ramifications. 这些变化注定会造成许多难以预料的社会后果。
• What are the ramifications of our decision to join the union? 我们决定加入工会会引起哪些后果呢？ 来自《简明英汉词典》