The state assets watchdog denied on Thursday the recent whopping salary rumor for heads of the country's centrally-administered state-owned enterprises (SOEs), addressing that they earned 531,000 yuan (77,366 U.S. dollars) on average in 2006.

"The assertion that executives in 155 SOEs were given millions of yuan was groundless and so was the word about the salary gap of millions between heads and employees," said an official with the State-owned Assets Supervision and Administration Commission (SASAC).

SASAC statistics showed that the yearly salary of SOE executives grew at 14.92 percent during 2004 and 2006, lower than the growth rate of SOE employees, which was not given by the official.

He said the state assets regulator was expected to slow the salary growth rate for executives in a bid to narrow the gap between heads and employees as executives' yearly salaries were already high.

During 2005 to 2006, the salary gap between SOE executives and employees kept shrinking, he said, but did not detail how big the gap was at present.

"The executives are not supposed to be overpaid, but how to keep and motivate talents in the fierce market competition is a hard nut," he added,"that's the dilemma faced by SOEs."

He underlined the urgent need of further reform to solve the problem.

The SASAC Distribution Department is responsible for establishing, implementing and supervising salary system for SOE heads. Their salary consists of fixed base salary and flexible benefit salary.

(Xinhua News Agency August 14, 2008)