China reevaluating brokerage executive salaries

Want China Times, Xinhua 2012-09-02

The government has emphasized a stronger, more complete evaluation
system is needed to ensure salaries are going into the right — and worthy —
pockets. (File photo/Xinhua)

China's top securities watchdog said Friday that it is considering regulating the salary of brokerage executives, in a bid to enhance management at securities firms.

In a set of draft rules released to seek public opinion, the China Securities Regulatory Commission said payment on more than 40% of brokerage executives' performance-related salary should be delayed for at least three years.

If executives fail to perform their duties and cause major irregularities or risks in the delay periods, the company should stop paying the remainder of the unpaid salary, according to the draft rules.

The commission said that the salaries of some Chinese brokerage executives are unreasonably structured and lack a complete evaluation mechanism. Therefore, the new rules require securities firms to establish more effective evaluation systems and set a link between wages and risks.

In a separate statement, the commission also released draft guidelines on the participation of securities firms in regional equity transactions, so as to better serve medium-sized, small and micro-enterprises.

Securities firms are able to participate in regional markets in two ways: either as members of the regional equity markets, or as shareholders of the regional markets involved in market regulation when starting a business, according to the commission.