SHANGHAI (Reuters) - China’s state-owned Bank of Communications (601328.SS)(3328.HK)(BoCom), the country’s fifth-largest listed lender, said that the government policy to cut pay at state-owned enterprises (SOEs) could result in a two-tier salary system.
Niu Ximing, the bank’s chairman, said that the reforms to rein in the salaries of top executives at SOEs - approved by the Communist party’s top decision-making body on Friday - could lead to government-appointed workers receiving state-determined pay, while employees untethered to the government receive a market salary in the same organisation.
Speaking at a press conference held at the Shanghai Stock Exchange on Monday, Niu added that BoCom has not studied the new scheme in detail but will implement the rules once it has received orders from regulators.
The new rules approved by the Politburo come after BoCom said it was considering management stock incentives as part of a plan to sell stakes to private investors under government reforms to give private capital a bigger role in the economy.
BoCom also said it has no plans to issue preference shares.
“We have considered issuing preference shares, but this year we have enough capital,” Niu said.
Industrial and Commercial Bank of China (601398.SS), China Construction Bank Corp (601939.SS) and Agricultural Bank of China (601288.SS) - three of the country’s largest five listed banks - have announced plans to issue preference shares.
Reporting by Engen Tham and David Lin; Editing by David Goodman