(Yicai) May 29 -- Remuneration for the highest-paid senior executives at China’s mainland listed companies tumbled last year for the first time in two decades due to narrowing corporate profits, a sluggish stock market and other factors, according to a recent report.

The average annual salary of the top-earning managers at firms that have gone public on the mainland dipped 3.3 percent in 2023 from the year before to CNY1.6 million (USD220,732), according to a report released yesterday by consulting firm Shanghai Rongzheng Enterprise Consulting Services.

Corporate profitability, stock market performance and industry restructuring all have an impact on executive earnings, said the report, which canvassed 5,311 companies listed on the mainland.

The net profit of listed companies dipped 1.4 percent year-on-year last year, while the benchmark Shanghai Composite Index tumbled 3.7 percent, and the Shenzhen Component Index plunged 13.5 percent. 

The chairman of biotech firm WuXi AppTec, Li Ge, was the highest paid executive with a salary of CNY41.9 million (USD5.7 million), the same as the previous year, according to the report.

The chairman of hospital equipment maker Mindray Bio-medical Electronics, Li Xiting, saw his yearly wage edge up 1.6 percent to CNY26.6 million. However the pay of vice president of silicon giant Tongwei Group, Li Bin, plunged 69.6 percent year-on-year, but still remained above CNY20 million (USD2.7 million).

The only other two executives to earn more than CNY20 million a year were chairman and president of dairy producer Yili Industrial Group, Pan Gang, and the executive president of artificial intelligence technology service provider PCI Technology, He Huaqiang.

Over 40 executives earned more than CNY10 million in 2023. Most of them are in the healthcare sector, and the others are in the solar, food and beverage, IT, home appliance and new energy vehicle industries.

The slowdown in the growth of traditional industries may affect executive remuneration, while the impact of emerging industries on wage scales may not be fully reflected. Also, the market's focus on executive remuneration could cause companies to be more conservative in setting executive pay.

Executives working in the finance sector are still the highest paid, with an average annual salary of CNY2.2 million (USD303,500), followed by those employed in the health and social work sectors, according to the report.

Those working in state-owned enterprises earn less on average than those in the private sector. And executive packages at companies listed on the Shanghai stock market’s Nasdaq-style Star Market are paid more than those working at firms listed on main Shanghai, Shenzhen and Beijing stock exchanges, as well as Shenzhen’s ChiNext board.

Due to the sluggish stock market, listed firms are unsure about their future performance. Last year, the number of stock incentive plans announced by listed companies slumped 12.6 percent from a year earlier to 666 schemes by 651 firms.

Editor: Kim Taylor