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05 Mar 2009 09:25
Executives at listed Chinese companies last year saw their pay grow about twice as fast as the profits of the companies they manage, state media reported on Thursday.
A study of 80 listed companies that released their 2008 earnings reports by February 24 indicated managers’ average income rose 43,8% from 2007 to $430 000, the China Daily reported.
But the average net profit of the same companies rose only 18,5% to 142-million yuan in the same period, the report said, citing figures from Shanghai Wind Information, a domestic financial data provider.
Top managers in China’s hard-hit property sector earned the most, with salaries at 13 property developers more than doubling in 2008, according to the study.
In contrast, the average net profit of the same 13 property developers rose 58% from the previous year to 401-million yuan.
“Historical figures showed that during economic hardship like the 1997 Asian financial crisis, executive payments were mostly decoupled from the companies’ performance,” the report said, citing an unnamed official from recruiting firm Russell Reynolds Associates.
The jumps in salaries indicated a failure of corporate governance with personal interests coming before investors’ interest, the official said.
Unlike in many western countries hit by the global downturn, Chinese executives have not faced public outrage over the size of their salaries. This has been largely due to the fact that while relatively generous, their remuneration is not astronomic.
Most of China’s more-than-1 500 mainland-listed companies are scheduled to release their 2008 financial results in March and April.—AFP
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