China caps pay for SOE financial bosses

China's Ministry of Finance has ordered state-owned financial institutions to cap the pay of top executives to avoid public discontent over high salaries.

New rules stipulate that 2008 executive pay -- including salaries, bonuses and insurance -- should be limited to 90 percent of their 2007 packages.

Long the backbone of China's economic development, state-owned enterprises are coming under increasing public scrutiny -- especially with regard to executive pay.

The government has drafted a law that sets a limit of 2.8 million yuan on pre-tax salaries in a bid to standardize SOE executive pay.

In response, some companies, including the Aluminum Corporation of China and Wuhan Steel and Iron Corporation, have announced plans to slash executive pay by 15 to 20 percent.

Meanwhile, the government is investigating "invisible" executive benefits, in a bid to further limit SOE spending and prevent corruption.

SOE officials have been known to take advantage of their positions to occupy public facilities and resources without paying.

China's 141 centrally-administrative SOEs saw profits fall about 30 percent to 665 billion yuan last year.

Xinhua News Agency correspondents reporting from Beijing.

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