Bank of Communications, the fifth-largest state-owned lender in China, is reportedly set to slash the pay of its senior executives significantly to implementing market-based mechanisms.
Recently, China’s state-owned enterprises have been attacked for inefficiency, poor innovation, and uneven pay structures that are mostly tilted in favour of senior executives.
The reforms would include ending fixed payments for living expenses and instead make those payments purely performance-based, Reuters reported citing an internal memo circulated to employees.
A bank spokeswoman told Reuters that the bank will not slash the fixed portion of employees’ pay.
"The central government has provided an opinion on manager pay so our bank is implementing the rules," the spokeswoman added.