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People's Daily Online>>China Business

Web China: Exorbitant executive pay prompts investor outcry


14:48, April 21, 2012

BEIJING, April 21 (Xinhua) -- The exorbitant salaries paid to business executives have triggered a fresh round of public outcry as well as bitter disappointment among individual investors who failed to cash in under a bearish Chinese stock market in 2011.

As thorough annual business reports are gradually being disclosed by listed firms in Shanghai and Shenzhen, focus has been fixed upon the profitability of companies and how much executives were paid when the markets' major key indices tumbled well over 20 percent last year.

Yin Ke, vice chairman of Shanghai-listed CITIC Securities Co., Ltd. (CITIC), received the top pay package among executives of listed securities firms, taking in 19.7 million HK dollars (2.54 million U.S. dollars) in 2011 -- almost 2.3 times the net profit of Hong Kong-based CITIC Securities International, a wholly-owned subsidiary of CITIC. Yin heads the subsidiary as its president.

This also made him the second-highest paid executive based on the business reports released so far.

Meanwhile, CITIC chairman Wang Dongming was paid 3.7 million yuan (about 587,000 U.S. dollars) in 2011. His earnings saw a 24.4-percent year-on-year increase, although the company reported only an 11.18-percent jump in its net profit in 2011.

The news has sparked a fire on the Internet. Posts on Sina Weibo, China's Twitter-like microblogging service, said that an average white collar worker would need to work for at least 160 years to earn the amount that Yin can make in one year.

Nearly 60 percent of the 61 public companies surveyed saw executives' bonuses rise despite losses recorded by companies last year, online news portal reported Thursday, citing data from information provider Wind Info.

"Executives' payments were rising even though company performances were weak, while we individual stock investors are in deep pain because we lost our money," an investor posted.

Another post sharply criticized the excessive salaries of chief executive officers (CEOs), saying stock prices concern the fundamental interests of investors and rising executive salaries hurt investors' interests, especially when company profits drop.

According to the annual business reports released so far, Alibaba CEO Lu Zhaoxi was the top-paid executive last year by taking in 47.6 million yuan.

Financial companies and real estate firms were the highest paid. Among the 10 highest-paid executives, four were from the real estate sector, including China Vanke Chairman Wang Shi, whose 15 million yuan in pre-tax earnings made him the third-highest paid executive. Wang was followed by Vanke President Yu Liang, who took the fifth spot by earning 13.1 million yuan before tax.

Although executive payment plans need to pass through shareholder meetings, many small investors say they actually have almost no say in the matter.

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