Ma received 66.16 million yuan in annual salary in 2007. It was surprising, but he was paid according to the company's salary scale. In Ping An, the salaries of its senior executives are closely linked to the company's performance each year. Ma earned the huge salary in 2007 mainly because of the excellent performance posted by the company that year. He is only one of the many senior executives who benefit from Ping An's current remuneration system.

System loopholes

Zhao Zhijiang (Beijing Youth Daily): After Ma Mingzhe's 66.16-million-yuan salary in 2007 was made public, he pledged that he would try to contribute as much as possible so as to merit the high payment. However, after just one year, Ping An lost more than 20 billion yuan ($3 billion) because of its disastrous investment in Fortis. If it was not for the opposition of shareholders and the securities regulator, which successfully prevented the company's plan of raising 120 billion yuan ($17 billion) for further overseas investment, Ping An's loss in 2008 would have been much larger. When the company is doing well, it's all right for Ma to get great returns; but when the performance is poor, Ma surely should take accountability for the wrong decisions. Is there a relevant accountability system in this listed company, which claims to strictly follow modern corporate governance practices?

Obviously, to cut his annual salary from 66.16 million yuan to zero is nothing more than "slight of hand." If a zero salary later becomes a regular means to avoid accountability, it's not a good thing for the company or for society.

Ma Guangyuan (www.ycwb.com): Apart from Ma Mingzhe, several chairpersons of domestic listed companies have done similar things to their personal salaries. Despite this, they are still under intense attack from the public. The problem does not lie in the amount of their payments, but in the underdeveloped corporate governance system.

Take Ma as an example. He has the say on almost everything within the company. As a result, he is able to make the decision to take no salary one year, but also to raise his salary to outrageous levels in the coming years when the company performs well.

People's dissatisfaction with senior executives' high salaries will not be quelled just because of pay reductions, and neither will extreme examples like forgoing an entire salary help ease their resentment. It's all about an effective system to keep senior executives' salaries at a reasonable level that grants shareholders the right to have a say in the remuneration system.

Qin Chuan (Changjiang Times): A strict and scientific remuneration system must be based on well-defined authority, responsibilities and impartiality in administering rewards and punishments. If a company performs well, senior executives should be rewarded. When the business fails, senior executives should have their salaries cut and be held accountable. In this sense, Ma Mingzhe's decision to forgo his 2008 salary is nothing to feel proud of.

The most effective solution is to set up a reasonable remuneration system, which is put under the supervision of financial, taxation and legal departments and also of shareholders and the public, so that senior executives cannot, and dare not, take excessively high salaries if they don't match their actual contributions.

Li Ruoyu (Beijing Morning Post): Ma Mingzhe's 66.16-million-yuan salary in 2007 has long been the target of criticism. When Ping An's huge losses from its failing investment in Fortis was announced, Ma was again brought under massive criticism. However, at that time, Ping An made no explanation about this. It was not until Ping An was about to publish its annual report that it revealed Ma's zero salary plan to the media.

With the ongoing financial turbulence, senior executives have the responsibility to do something to encourage their employees, so that they can have a sense of unity in the hard times. They should act more decisively, but should not only after shareholders and the public have already become angry.

Listed companies must establish long-term remuneration programs for their senior executives, clearly stipulating when to raise the payment and when to cut it. The system should also be transparent and under the supervision of investors and the public. Otherwise, the zero-salary practice will become a means for senior executives to deflect their responsibilities.