China's BoCom to cut top executives' pay
BANK of Communications (BoCom), China's fifth-largest bank, will "significantly" cut the pay of its senior executives and tie larger portions of all employees' pay to performance, according to an internal document seen by Reuters.
Beijing is pushing for pay reforms at China's state-owned enterprises, which have often come under fire for inefficiency and a lack of innovation, as well as uneven pay structures that favour senior executives the most.
The internal memo, circulated to employees on Dec 31, said that the reforms, which would include ending fixed payments for living expenses and instead make those payments purely performance based, would be "a difficult but important" reform and "important to implementing market-based mechanisms".
Many big Chinese firms pay a fixed salary and fixed subsidies for certain living expenses such as rent and education fees, as well as performance-based bonuses.
A BoCom spokesman said that the bank was not cutting the fixed portion of employees' pay, but added: "The central government has provided an opinion on the managers' pay so our bank is implementing the rules." She gave no further comment and declined to confirm or deny the existence of the memo.
Last week, the official China National Radio reported that senior executives at large state enterprises, including banks, would face pay cuts this month under a series of government pay reforms proposed in August.