Many banks and listed companies have announced plans to cut bonuses and salary for top executives this year if they fail to reach their business targets.
Members of boards of directors and supervisory committees would be required to reach yearly profit goals in order to receive their highest pay.
A number of gloomy business forecasts prompted banks to lower their yearly targets. LienVietPost Bank said that they would decrease pay for board members by VND5 billion (238,000), while VietinBank announced that their pay structure would be performance-based. In a similar decision, Techcombank will also reduce payment to members of the boards of directors and supervision board.
SHB chair, Do Quang Hien, asked for a 10% reduction in pay for members of the board of directors and a 5% reduction for regular staff.
Dr. Nguyen Minh Phong said that the salary cuts were suitable for the current economic climate.
“In many foreign countries, when banks and other large enterprises fail to meet their targets, the executives face penalties in the way of salary cuts. But in the state-owned enterprise sector in this country a lot of top executives continue to collect large pay-outs even though the business is taking large losses," said, Phong.
