工资改革意味着业绩决定薪酬

Authorities say the reforms will trim certain salaries by as much as 70-percent.

In the pilot reform, around 200 executives from 72 different SOEs are going to see their salaries capped at 600-thousand yuan, or 100-thousand U.S. dollars, per year.

The salary structures of these executives have also been changed.

Part of their salaries is now being based on the long-term performance of their companies, with part of their salaries being calculated only at the end of the year, when the annual results of a company are known.

Qiu Xiaoping is China's vice minister of Human Resources.

He says the new salary structure also takes into account the variations in being an executive at different state-run companies.

"Take the nature of companies for example: the profits made by companies in a highly competitive industry should be higher than the profits made by monopolies and non-profit organizations. From this perspective, the salaries of executives work for these companies will be adjusted accordingly, compared to those who manage SOE's with smaller capacity."

The massive salary gap between what SOE top executives have been making compared to the average worker at the same company has generated a lot of complaints over the years.

Senior managers had been earning as much as 30-times what an average employee was making.

The changes should narrow the gap to 7 to 8 times or less.

Ye Tan, a financial commentator for CRI, says the salary reforms is meant to help make managers more accountable.

"Their expenses, apart from their salaries, have long been included in an SOE's operating costs. But now, we've changed the system so managers have to be more accountable for what they spend."

As part of the changes, the salaries of SOE executives are also going to be made public.

For CRI, I'm Min Rui.