The Cabinet approved a rule on salary ranges for high-level executives of state-funded corporations March 10.

Under the new rule, beginning in April, the upper limit for such monthly salaries will be capped at NT$324,000 (US$10,206) for company chairmen and NT$318,000 for presidents, or CEOs.

The new regulation will apply to all state-run enterprises, including Hua Nan Financial Holdings Co. Ltd., China Steel Corp., Taiwan Asset Management Co. and Financial Information Services Co. Ltd., all of whose chairmen will have to take a pay cut in April.

The Cabinet’s Government Shareholding Management and Supervisory Unit also decided to actively encourage employees of state-funded companies to take early retirement to resolve problems of high average age and personnel costs, maximize the influx of new talent and increase productivity.

Ministry of Finance officials pointed out that an employee with 20 years of service could draw 27 months of retirement pay.

Administrative Deputy Minister of Finance Tseng Ming-chung said in the future chairmen and presidents of state-run firms may not collect more than twice the pay of corporate officers of the same rank in companies of the same nature or scale. Meanwhile, bonuses may not exceed salaries.

For example, the president of Taiwan Financial Holdings Co. Ltd. receives a monthly salary of NT$159,000, while that of Hua Nan Financial Holdings gets NT$450,000, so the HNFH president will face a salary cut of more than NT$130,000.

Year-end and performance bonuses, as well as other extraordinary income for chairmen and presidents of state-run enterprises, will not be allowed to surpass monthly salaries, managerial stipends and other fixed income.

The MOF will soon announce details of the regulations, which will apply to the Ministry of Economic Affairs, Ministry of Transportation and Communications and Financial Supervisory Commission.

While exceptions will be allowed for adjustments to the salaries of chairmen and presidents upon approval by the Cabinet, officials emphasized that few such exceptions would be granted.

During the meeting, convened by Vice Premier Eric Li-luan Chu, representatives of some ministries objected to a cap on salaries because it would make it hard to compete with similar enterprises abroad, leading to a drain of qualified personnel. Chu insisted, however, that any corporate officers appointed or nominated by the government would have to abide by the new regulations. (THN)

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