VietNamNet Bridge - High-ranking executive officers of state-owned conglomerates are believed to receive high wages even though the enterprises operate ineffectively.

A report of the Electricity of Vietnam (EVN) showed that in 2015, the conglomerate paid VND8.63 billion to executive officers. Thirteen high-ranking officers of EVN received VND600 million each year.

Ngo Tri Long, a renowned pricing expert, commented that the salaries for state-owned enterprises’ (SOEs) managers depend on business performance. He does not think VND600 million a year, of VND50 million is ‘too high’ for CEOs of enterprises which run well and make high profits.

Meanwhile, Nguyen Van Ngai from the HCM City Agriculture and Forestry University, said that the income level was too high compared with the income of the average wage in society.

“The salaries for scientists, professors and doctors are much lower. Even state officials receive less than VND50 million a month,” he explained.

EVN’s executives still receive high salaries though the enterprise’s debt is relatively high.

High-ranking executive officers of state-owned conglomerates are believed to receive high wages even though the enterprises operate ineffectively.

Ngai cited a report as saying that by the end of 2014, the total assets of the holding company had reached VND576.133 trillion and the stockholder equity VND161.190 trillion. 

Its ratio of accounts payable on the state’s capital was 2.64, or value of VND425 trillion. EVN’s foreign debt had exceeded VND162 trillion.

“It would be fair to pay high to managers who can help businesses make fat profit. EVN always complains about loss and big loans and insists on raising the selling price to cover expenses,” Ngai said. “There exists a paradox here."

In fact, EVN is not the only SOE that incurs the public’s criticism about high pay for managers. Some days ago, local newspapers reported that the leaders of the State Capital Investment Corporation (SCIC) received VND100 million a month each in 2015.

The managers of Sabeco, a brewery in which the state holds controlling stakes, reportedly receive billions of dong a year.

“The rich-poor gap has widened,” Ngai commented.

Meanwhile, Long said SOEs have bigger advantages than privately run enterprises and have more capital.

SCIC, for example, specializes in making investment in enterprises with the state’s huge capital. It can make fat profits every year thanks to the large ownership ratios in profitable enterprises, such as Vinamilk and FPT. SCIC roles and business performance remain unclear, however.

Nguyen Hoang Hai, deputy chair of the Vietnam Association of Financial Investors (VAFI), said: “I don’t agree with the EVN’s current management method. The apparatus is cumbersome, while the investment rate is high,” he said.

Dat Viet