This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/world/asia-pacific/7993377.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
China bosses told to cut salaries China bosses told to cut salaries
(about 2 hours later)
Executives of state-owned banks and insurers in China have been told to cut their salaries to ease the disparity between themselves and Chinese workers.Executives of state-owned banks and insurers in China have been told to cut their salaries to ease the disparity between themselves and Chinese workers.
A government directive reported by the official China Daily newspaper, said that individual financial enterprises paid top executives too much. A government directive said that individual financial enterprises paid top executives too much.
The ruling came amid growing concern about the economic downturn. The ruling came amid growing concern about the economic downturn, which has put some 20 million people out of work.
Executive pay in China is modest by Western standards, but is many times that of ordinary workers.Executive pay in China is modest by Western standards, but is many times that of ordinary workers.
It is estimated that the global economic crisis has thrown at least 20m people in China out of work. The average employee in one of China's top financial institutions earns $58,500 (£40,000) - with those at the very top of these firms earning considerably more.
The directive follows rising public grumbling about huge pay packages for top executives at state-owned financial companies, the China Daily reported. In Chinese cities the average employee earns about $2,200 (£1,500) a year. Those in rural areas far less, according to a survey by a Shanghai business magazine.
'Too much''Too much'
Total executive pay for 2008 at financial institutions - which many are still calculating - must not surpass 90% of the 2007 levels, the Ministry of Finance said. Executive pay packages for 2008 still being calculated, should be no more than 90% of the level the year before, the Finance Ministry said.
Companies whose profits declined last year should slash another 10%, with deeper cuts at those in financial trouble, it said. Those firms whose income fell last year should cut their executives' pay still further, it said.
These cuts appear to be a response to growing public disquiet at the salaries paid to senior executives Chris HoggBBC correspondent in Shanghai
"Individual financial enterprises pay top executives too much. The gap between them and average workers and internal staff is clearly expanding," the ministry said."Individual financial enterprises pay top executives too much. The gap between them and average workers and internal staff is clearly expanding," the ministry said.
It said pay cuts were needed to "further equalise distribution of income".It said pay cuts were needed to "further equalise distribution of income".
Most of China's major banks, insurers, stock brokerages and other financial institutions are government-owned.Most of China's major banks, insurers, stock brokerages and other financial institutions are government-owned.
But many have listed Hong Kong subsidiaries and it was unclear how executives linked to those entities might be affected. The people who run these institutions will have their pre-tax income reduced by 10% - that means cuts to salary, bonus and social insurance credits.
The country's economy has been forecast to grow by 8% this year but the collapse in global demand for exports is hurting Chinese workers. The BBC's Chris Hogg in Shanghai says these cuts and further 10% reductions for those companies which are losing money, appear to be a response to growing public disquiet at the salaries paid to senior executives.
Executive pay is set by each company's board of directors. A directive like this will be hard to ignore but for some perhaps quite hard to implement, our correspondent says.
Many have listed Hong Kong subsidiaries and it was unclear how executives linked to those entities might be affected.