Executive pay rising faster in China

Executive pay rising faster in China

CHINA - When it comes to paying the boss, China is closing in on the United States, a new study shows.

Salaries of executives in China rose 8 per cent in 2012, compared with 3 per cent for US executives, according to the National Salary Comparison study by consultants ECA International.

The numbers, according to the London-based firm, put top Chinese executives on course to wield greater spending power than their US counterparts by 2017.

The study, released on Wednesday, has significant implications for US companies seeking to recruit executive talent from China. The resulting drop in buying power for Chinese expatriates moving to the US would "make it difficult for US companies to offer local salaries to Chinese executives".

ECA, which provides software and services for corporate management of foreign employees, found the typical Chinese executive's buying power was 75 per cent that of a similar-level US manager last year, up from 57 per cent in 2007. The study also found the buying power of a junior manager in China rose to 40 per cent of a similarly situated US employee from less than a third in 2007.

"If the gap between US and Chinese buying power continues to close at the same rate, by 2017 Chinese executives will be better off than their US counterparts," the study said.

Christine Hayward, managing director for Asia-Pacific and the Middle East at the Association of Executive Search Consultants, said ECA's study affirms the findings of a survey of executives in China that her New York-based trade association conducted in October.

In the AESC survey, 60 per cent of respondents believed the compensation gap between locals and expatriates is shrinking, Hayward said. What that means, she said, is that "there is a huge demand for local Chinese talent, and the local Chinese are becoming more sophisticated in understanding and knowing how to negotiate their compensation packages to be on par with those of expats".

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