Salary reform on SOE chiefs to shake up State sector

A clerk counts Chinese 100 yuan banknotes at a branch of China Construction Bank in Nantong, Jiangsu province, Dec 2, 2014. [Photo/Agencies]

The salary reform, which trims payment for executives from centrally administered State-owned enterprises in China, is now in effect starting from the New Year's day.

The reform is first being implemented on some 200 executives from 72 State companies.

The difference in executives' salary as a result of the reform will be mainly reflected on the performance of duties.

"Take the nature of companies for example, the index number of those companies in highly competitive industries should be higher than those monopolies and non-profit ones. And from the perspective of the size of the business, companies with bigger operational capacity will have higher index figures than those with smaller capacities. The purpose of the coefficient is to reflect the varied difficulty for executives running different companies, and the differences in their job performance," said Qiu Xiaoping, vice minister of Human Resources and Social Security.

For years, the yawning gap between what is paid to top executives and average workers at these state companies has led to grievances among the public.

The move to narrow the gap between top executives and average workers is part of a broader plan to reform the inefficient state sector.