China mulling higher pay for SOE executives

Singapore

CHINA is considering increasing executive compensation at big banks and other state-owned enterprises (SOEs), according to a person with knowledge of the plan, as the government seeks to retain talent needed to overhaul the bloated state sector.

Premier Li Keqiang told a meeting of more than 100 top executives in Beijing last month the government was rethinking a 2015 policy capping their pay at a fraction of their overseas peers, said the person, who asked not to be named because the meeting was private. Mr Li promised a system with more competitive rates, probably tied to performance, the person added, in an effort to hold onto their managers.

The discussions show the challenges facing President Xi Jinping as he pushes China's almost US$20 trillion state sector to embrace structural reform while cracking down on perceived excesses that have fuelled public anger at the Communist Party. While the cap saw the earnings of China Construction Bank Corp chairman Wang Hongzhang halve to 600,000 yuan (S$123,000) in 2015, the salaries of some overseas executives have stayed high: JPMorgan Chase's Jamie …