State-owned enterprise leaders can receive a basic salary of 80 million VND/month.

The Ministry of Labor, War Invalids and Social Affairs proposed that the basic salary of key leaders in State-owned corporations and groups will be divided into 8 levels. Of which, the Chairman of the Board of Members will have the highest basic salary of 80 million VND/month and the lowest of 32 million VND/month. The Head of the Supervisory Board will have the highest salary of 66 million VND/month and the lowest of 26 million VND/month. Members of the Board of Members, Board of Directors, and Supervisors will have the highest basic salary of 66 million VND/month and the lowest of 25 million VND/month.

With the contents that the Ministry of Labor, War Invalids and Social Affairs has just submitted to the Government in the draft Decree regulating labor management, wages, remuneration and bonuses in State-owned enterprises, it is proposed that wages in this sector must be linked to labor productivity and production and business efficiency, aiming to ensure market level.

Approaching the market salary level

The basic salary level will be the basis for calculating the planned salary level and is regulated in connection with three indicators: capital, revenue, and profit divided by industry and field, and not based on ranking as currently regulated.

Thus, if the enterprise has a profit and a higher return on capital than the previous year, the maximum planned salary is twice the basic salary, meaning the maximum salary of the chairman of the board of members is 160 million VND/month.

Regarding salaries and bonuses of employees and executives, the Ministry of Labor, War Invalids and Social Affairs proposes that the State only stipulates principles and assigns enterprises to determine and pay according to the enterprise's regulations.

Enterprises that exceed their planned targets will be given a maximum of two months' salary to their salary fund to encourage them to improve their efficiency. Enterprises will be given additional salaries for specialized workers and highly skilled workers in key areas.

For the executive board, the expected salary and bonus are calculated in the salary and bonus fund for employees and assigned to the Board of Members to evaluate and decide on the specific salary level according to the level of completion of the production and business plan.

In particular, the draft decree limits the maximum benefit of the General Director to no more than 10 times the average salary of employees.

With this provision, the average salary of a general director distributed by the enterprise according to the maximum salary payment regulations can reach about 100-120 million VND/month. Particularly, large-scale corporations and groups can reach a maximum of about 170-180 million VND/month.

This maximum salary level ensures that it covers the actual salary currently paid, is correlated with the maximum salary of the Chairman of the Board of Members of the same enterprise, and also initially approaches the salary level in the market.

Salary linked to business performance

According to the Ministry of Labor, War Invalids and Social Affairs, the current salary and bonus mechanism at state-owned enterprises is showing some shortcomings. For example, there is a distinction between 100% state-owned enterprises and enterprises with controlling shares of the State, the salary policy is not clearly differentiated according to the scale of productivity and efficiency between enterprises, the salary of managers is still low...

The drafting agency built the decree in the direction that wages must be linked to labor productivity and production and business efficiency, aiming to ensure market level.

Enterprises are free to decide on their own wage policies; implement contracted wage costs, including bonuses in the wage fund, linked to the tasks, production and business conditions, industry, and nature of the enterprise's operations.

In addition, the draft decree also clearly distinguishes the salary of the representative of State capital from the executive board. In which, the executive board shares the salary fund with the employees and has a control over the maximum salary of the general director compared to the average salary of the employees. The salary is implemented on the principle that whoever hires and appoints is the one who evaluates and pays the salary.