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6 top SOE chiefs to pay for failure
By Xiao Min (China Daily)
Updated: 2004-10-21 08:45

Six top bosses of major State-owned enterprises could have their pay cut for their firms' failure to meet performance targets.

The step, the first of its kind, was announced yesterday by the State-owned Assets Supervision and Administration Commission (SASAC), which acts on behalf of the State as the owner of and investor in State assets in central SOEs.

SASAC is acting on its earlier pledge to either award or punish SOE chiefs for their performance, Li Shousheng, director of SASAC's performance evaluation bureau, said on Tuesday.

SASAC signed contracts with the top executives of 180 of the enterprises, holding them directly responsible for the firms' performance.

Targets have been set for the firms' profits and returns, with the bosses' pay being directly linked to these. Bosses at poorly performing firms will suffer pay cuts, but those at enterprises doing very well will receive bonuses.

Signing such performance-related contracts is a pioneering move for SASAC, part of the central government's efforts to improve the management efficiency of the SOEs and clarify the liabilities of those running the enterprises.

According to the SOEs' interim results, six of them are unlikely to reach the targets, so their managers will see their pay cut accordingly.

He revealed this while taking part in an inspection tour of SOEs in the nation's northeastern provinces.

SASAC released a detailed regulation on the evaluation of the SOE chiefs at the end of last year, which set comprehensive standards to assess the performance of SOE executives and relevant indices used to grade their work.

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