China orders pay cuts for corporate high-flyers

China has ordered pay cuts for executives at state-owned banks and other finance firms as public anger grows over their high salaries during the global economic crisis.

Last year's pre-tax income for top executives, including salaries, bonuses and benefits, must not exceed 90 percent of their earnings in 2007, the Ministry of Finance said in a statement on its website late Thursday.

It added the cap would be 80 percent for executives at financial companies whose operating profits fell last year.

The ministry said salaries and bonuses in the financial industry had been growing too quickly over recent years.

"The pay cut is conducive to equitable distribution of social income and to the interests of the nation and shareholders," it said.

"Individual financial institutions have paid excessively high compensation to their executives, the income gap between the executives and the average level of the society and other internal staff has widened noticeably."

It also told the financial companies effected to put in place unspecified salary ceilings for other staff.

The ministry did not name any companies or their executives' incomes.

Most Chinese financial institutions, including banks, insurance companies and securities brokerages, are owned by the state and only listed companies are obliged to disclose payment for senior executives.

The official China Securities Journal reported last week that top executives at listed financial institutions earned an average of 604,600 yuan (89,000 dollars) each for 2008, the highest among all industries.

While this is not high compared with Western standards, China remains an officially communist country and its state-run press on Friday pointed out that the finance executives were still earning far more than ordinary workers.

Peter Ma, the chairman of China's Ping An Insurance Group, in February gave up his salary for 2008 following the firm's disastrous investment in ailing European financial group Fortis.

Ma was one of China's highest paid executives. In 2007, he earned 66.2 million yuan (9.7 million dollars) before taxes.