BEIJING (Reuters) - China is set to make executives at its biggest state-owned firms publicly reveal their salaries, the state-run Economic Information Daily reported on Monday, the latest in a series of reforms aimed at boosting corporate efficiency and transparency.
Payment disclosure, which will apply to central government controlled state-owned enterprises (SOEs) - both publicly traded and private - represents Beijing’s first scheme to force officials to report their income.
The newspaper said the government “will set up a payment information disclosure system” and that details on compensation “must be disclosed according to the standard of publicly listed companies.” It did not explain how the disclosure system would work.
“Central SOEs’ senior executives’ ‘invisible income’ has been the most controversial grey area of SOE compensation and a focus of inquiries from society,” the newspaper said.
After the reform is implemented in January, the compensation level for executives appointed by the state will fall to 7 to 8 times that of an average employee, compared with 12 times the current average, the Economic Information Daily reported, citing an unnamed SOE source.
The report comes as Beijing seeks to transform executive compensation at its biggest state firms by standardizing salaries, curbing misuse of non-salary benefits and holding managers more responsible for the performance of their firms.
The first round of pay cuts, which follows the Politburo’s approval of central SOE reform measures in August, will involve 72 central SOEs and include well-known conglomerates such as PetroChina Co Ltd, China Petroleum & Chemical Corp (Sinopec) and China Mobile Ltd, the official Xinhua News Agency reported in September.
The bosses at China’s biggest banks may face pay cuts of as much as 1 million yuan (104,089 pounds), Xinhua reported last Friday.
The government is also setting up a standard non-salary compensation and supervision system, which will prohibit executives from claiming non-salary income from their firms, or bonuses from subsidiaries.
The campaign to reform SOE executives’ salaries come as the government seeks to push forward a wider campaign against extravagance and decadence by officials employed by the state.
Reporting by Matthew Miller and Beijing Newsroom