SOE managers to be paid on their performance

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Last updated at: (Beijing Time) Thursday, December 11, 2003

SOE managers to be paid on their performance

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The watchdog of Chinese stated-owned assets issued an evaluation method Tuesday, establishing a standard to assess the achievements of the senior managers of the 189 national stated-owned enterprises (SOEs) under its direct supervision.

Li Shousheng, director of the evaluation department of the Stated-owned Assets Supervision and Administration Commission under the State Council (SASAC), said that setting up an evaluation system has been one of the major tasks of the SASAC, and implementation of the method means a step further toward a market-based administration system of China's SOEs.

According to the method, SASAC will sign contracts with presidents, board chairmen and other chief managers of SOEs, setting annual and quarterly goals for the SOEs, and pay the examinees based on how well they fulfill their tasks.

The method includes basic and classified indices. The former will be included in every contract, while the later will be set according to the industry a particular SOE belongs to, as well as its current operational situation.

The basic indices for annual assessment consist of the total volume of the annual profits and the yield of net assets; basic indices for quarterly assessment include increment of the state-owned assets and the three-year average growth rate of an enterprise's main business.

The SASAC will sign contracts with some SOEs in mid-December, and implement the method in all national SOEs from Jan. 1, 2004.

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