Decree No. 52/2016/ND-CP on salaries, remuneration, and bonuses for managers of state-owned single-member limited liability companies holding 100% of charter capital

DECREE

PROVISIONS ON SALARIES, FEES, AND BONUSES FOR MANAGERS OF JOINT STOCK COMPANIES WITH A SOLE STATE CAPITAL CONTRIBUTION RATIO OF 100%

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Labor Code on June 18, 2012;dated June 18, 2012;

Pursuant to the Enterprise Law dated November 26, 2014;

Pursuant to the Law on State Capital Management for Investment in Production and Business at Enterprises dated November 26, 2014;, using state capital for production and business operations at enterprises on January 26,2014;issued the Decree stipulating salaries, fees, and bonuses for managers of joint stock companies with a sole state capital contribution ratio of 100%.This Decree stipulates salaries, fees, and bonuses for managers of joint stock companies with a sole state capital contribution ratio of 100%, including:

At the request of the Minister of Labor, War Invalids and Social Affairs,Pursuant to the request of the Director General of the Department of Vocational Education;

At the proposal of 1. Joint stock companies with a sole state capital contribution ratio of 100% are parent companies of state economic groups, parent companies of state corporations, and parent companies within a group of parent-child companies.The joint stock company referred to in Clause 1 and Clause 2 of this Article hereinafter shall be referred to as the company.1. Dedicated managers and non-dedicated managers of the company, including: Chairman of the Board of Members or Company Chairman; Member of the Board of Members; Head of the Supervisory Board; Supervisor; General Director, Director, Deputy General Director, Deputy Director, Chief Accountant (excluding General Directors, Directors, Deputy General Directors, Deputy Directors, and Chief Accountants working under labor contracts).2. Ministries, ministerial-level agencies, government agencies, provincial People's Committees, municipal People's Committees directly under the central government, or organizations established according to the provisions of law assigned by the Government to implement the rights and responsibilities of the owner representative towards the company (hereinafter collectively referred to as the owner representative agency).3. Agencies, organizations, and individuals related to the salaries, fees, and bonuses for managers of the company.

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Article 3. Classification of Salaries for Dedicated Managers of the Company

Dedicated managers of the company continue to be classified according to the company level specified in Appendix I attached to this Decree as a basis for implementing legal regulations until the Government issues new regulations.

2. An independent state-owned joint stock company with 100% state capital contribution.

Article 4. Principles for Determining and Paying Salaries, Fees, and Bonuses

Article 2. Applicability

1. Salaries for dedicated managers of the company are determined and paid based on production and business efficiency, management results, and control, with a maximum cap and ensuring reasonable parity with the salaries of employees in the company.

2. Fees for non-dedicated managers of the company are calculated based on work and working hours, but not exceeding 20% of the salary of dedicated managers of the company; for managers who represent capital contributions in multiple companies and businesses, the fee paid by other companies and businesses is submitted to the company for payment based on the degree of task completion, but not exceeding 50% of the actual salary received at the company. The remaining portion (if any) is recorded as other income of the company.

3. The fund for salaries and fees of company managers is determined annually, separated from the employee salary fund, established by the company and submitted for approval by the owner. Monthly, managers are temporarily advanced 80% of the estimated salary and fee amount for that month; the remaining 20% is settled and paid out at the end of the year.

4. Salaries and fees of company managers are recorded in production costs or business expenses and reflected as a separate item in the annual financial report of the company.

5. Bonuses for company managers are determined annually corresponding to production and business efficiency, management results, and control, partially paid at the end of the year, and the remainder paid after the term ends.

6. In cases where the Company Chairman concurrently serves as General Director or Director, they may only receive the salary of the highest position.

7. Salaries, bonuses, and fees for the Head of the Supervisory Board and Supervisors are determined according to this Decree, after deducting social insurance, health insurance, and other amounts as prescribed by law for submission to the insurance authority, the company submits to the owner representative agency to form a common fund and pay Supervisors based on the degree of task completion. For financial supervisors in state economic groups, it is submitted to the Ministry of Finance for evaluation and payment.

2. Remuneration for non-executive company managers shall be calculated based on workload and working hours, but shall not exceed 20% of the salary of executive company managers; for company managers appointed to represent capital contributions in multiple companies and enterprises, the remuneration paid by other companies and enterprises may be submitted to the company for payment according to the level of task completion, but shall not exceed 50% of the actual salary received at the company. The remaining portion (if any) shall be recorded as other income of the company.

3. The wage and remuneration fund for company managers shall be determined annually and separately from the wage fund for employees, established by the company and approved by the owner. Monthly, company managers shall be advanced 80% of the estimated wages and remuneration for that month; the remaining 20% shall be settled and paid out at the end of the year.

4. Wages and remuneration for company managers shall be accounted for in production costs or business expenses and reflected as a separate item in the company's annual financial report.

5. Bonuses for company managers shall be determined annually based on production and business efficiency, management results, and control outcomes, with a portion paid at the end of the year and the remainder paid after the term ends.

6. In cases where the Chairman of the Company concurrently holds the positions of General Director or Director, they shall only receive the salary of the highest-ranking position.

7. The wages, bonuses, and remuneration for the Head of the Supervisory Board and Supervisors shall be determined in accordance with this Decree, after deducting social insurance, health insurance, and other amounts as prescribed by law to be paid to the relevant authorities. The company shall submit these amounts to the representative of the owner to form a common fund and pay the Supervisors according to their level of task completion. For Financial Supervisors in state-owned economic groups, these amounts shall be submitted to the Ministry of Finance for evaluation and payment.

Article 5. Determination of the planned salary fund and remuneration fund

1. The planned salary fund shall be determined based on the number of full-time company management personnel and the average planned salary level pursuant to Clause 2 of this Article.

2. The average planned salary level shall be determined based on the basic salary level stipulated in Appendix II attached hereto (hereinafter referred to as the basic salary level) and the additional adjustment factor linked to the planned profit increase compared to the actual performance of the immediately preceding year as follows:

a) For companies that maintain and develop state capital, pay taxes according to regulations, do not reduce labor productivity, and have planned profits higher than the actual performance of the immediately preceding year, the maximum additional adjustment factor shall be 0.5 times the basic salary level if the company operates in the banking, finance, telecommunications sector with profits under VND 500 billion, in the oil and gas extraction and processing, mining, electricity, trade, service sectors with profits under VND 300 billion, and in other sectors with planned profits under VND 200 billion; the maximum additional adjustment factor shall be 0.7 times the basic salary level if the company operates in the banking, finance, telecommunications sector with profits from VND 500 billion to less than VND 1,000 billion, in the oil and gas extraction and processing, mining, electricity, trade, service sectors with profits from VND 300 billion to less than VND 700 billion, and in other sectors with profits from VND 200 billion to less than VND 500 billion; the maximum additional adjustment factor shall be 1.0 times the basic salary level if the company operates in the banking, finance, telecommunications sector with profits of VND 1,000 billion or more, in the oil and gas extraction and processing, mining, electricity, trade, service sectors with planned profits of VND 700 billion or more, and in other sectors with profits of VND 500 billion or more.

b) For companies that maintain and develop state capital, pay taxes according to regulations, and have planned profits equal to the actual performance of the immediately preceding year, the average planned salary level shall be equal to the basic salary level. In cases where planned profits are lower than the actual performance of the immediately preceding year or there is no profit, the average planned salary level must be lower than the basic salary level.

c) For loss-making companies (excluding objective circumstances specified in Clause 6 of this Article), the average planned salary level shall be equal to the salary level based on the wage coefficient stipulated in Article 3 of this Decree and the basic salary level.

d) For companies that reduce losses compared to the actual performance of the previous year or newly established companies, the planned salary level shall be determined based on the degree of reduced losses or production and business plans, ensuring overall proportionality and reporting to the competent authority for consideration and decision.

In cases where planned profits are equal to or higher than the actual performance of the immediately preceding year but the average planned salary level determined according to Point a and Point b above is lower than the actual average salary level of the immediately preceding year, the average planned salary level shall be calculated as the actual average salary level of the immediately preceding year.

3. For companies producing and trading products and services with state-set production and trading limits leading to labor productivity and planned profits not increasing compared to the actual performance of the immediately preceding year, the maximum increase in the average planned salary shall not exceed the forecasted consumer price index for the year as stipulated in the Resolution of the National Assembly on the Annual Socio-Economic Development Plan.

4. For companies implementing public goods products and services ordered by the State, assigned plans, or operating without profit objectives, the profit target shall be replaced by the volume of products and services, tasks, where the volume of products and services, tasks is not lower than the actual performance of the immediately preceding year, the maximum realized average salary shall be calculated as the basic salary multiplied by the forecasted consumer price index for the year as stipulated in the Resolution of the National Assembly on the Annual Socio-Economic Development Plan. The specific salary level shall be decided by the competent authority representing the owner, consistent with the local salary level.

5. The planned remuneration fund for non-full-time company management personnel shall be calculated based on the number of non-full-time company management personnel, working hours, and the remuneration level stipulated in Clause 2 of Article 4 of this Decree.

6. When determining the planned salary and remuneration funds, the company shall exclude objective factors affecting labor productivity and planned profits compared to the actual performance of the immediately preceding year, including:

a) The State adjusts prices (for products and services priced by the State), grants corporate income tax incentives, increases or decreases state capital, adjusts policies or requires the company to relocate, reduce production and business sites directly impacting the company's labor productivity and profit targets.

b) The company participates in implementing political tasks, ensuring social security, balancing supply and demand for the economy as decided by the Prime Minister, implements the transfer of state ownership rights over enterprises undergoing restructuring, debt resolution, and restructuring as directed by the Prime Minister, new investments, expanding production and business, increasing depreciation to recover capital quickly approved by the competent authority, and the difference in bonuses compared to the actual performance of the previous year for lottery trading companies.

4. When the company implements public goods products and services ordered by the State, assigned plans, or tendered contracts, the corresponding planned salary fund for the volume of public goods products and services is determined based on the volume of public goods products and services ordered by the State, assigned plans, or tender contracts.

Article 6. Determination of the wage and remuneration fund for implementation

1. The wage fund for implementation of the dedicated management personnel shall be based on the number of dedicated management personnel of the company and the average planned wage level linked to the degree of achievement of the indicators prescribed in Article 5 of this Decree, wherein if the realized profit (after excluding objective factors according to regulations) exceeds the planned profit by 1%, the management personnel of the company shall be entitled to an additional maximum of 1% wage, but not exceeding 20% of the average planned wage level.

2. The remuneration fund for implementation of non-dedicated management personnel shall be calculated based on the number of non-dedicated management personnel, working time, and the remuneration level stipulated in Clause 2 of Article 4 of this Decree.

3. The company must evaluate the implementation of objective factors affecting labor productivity and realized profit compared to the plan to exclude them when determining the wage and remuneration fund for implementation.

4. Based on the wage and remuneration fund for implementation and the temporarily advanced wage and remuneration fund for management personnel, the company shall determine the remaining wage and remuneration fund to be enjoyed. In cases where the temporarily advanced amount exceeds the wage and remuneration fund for implementation, the excess wage and remuneration paid out must be refunded immediately within the year.

Article 7. Bonus Fund

1. The annual bonus fund for dedicated and non-dedicated management personnel shall be implemented in accordance with the Government's regulations on state capital investment in enterprises and the management and use of capital and assets in enterprises.

2. The bonus fund specified in Clause 1 of this Article shall be allocated 90% annually for end-of-year bonuses. The remaining portion of the bonus fund (10%) shall be used for bonuses at the end of the term based on the degree of completion of production and business tasks throughout the term of the management personnel.

Article 8. Payment of Wages, Remunerations, and Bonuses

1. Wages and bonuses shall be paid to management personnel based on their contribution to production and business efficiency and management results, as stipulated in the company's wage, remuneration, and bonus regulations.

2. The wage, remuneration, and bonus regulations shall be established in accordance with the law, ensuring democracy, transparency, and having the participation of the Company Trade Union Executive Committee, and obtaining approval from the representative body of the owner before implementation.

Article 9. Implementation responsibilities

1. Board of Directors or Chairman of the Company:

a) In the first quarter of each year, establish the planned wage and remuneration fund for management personnel linked to the production and business plan, ensuring a reasonable correlation with the wages of workers, and submit it to the representative body of the owner for approval.

b) Based on the results of achieving production and business targets, determine the wage and remuneration fund for implementation, the bonus fund, and report to the representative body of the owner for approval no later than the first quarter of the following year. For the parent company of state-owned economic groups, the parent company of special-class state-owned corporations, and state-owned corporations performing public service roles, simultaneously send to the Ministry of Labor, Invalids, and Social Affairs for monitoring.

c) Determine and remit the amount of wages, remunerations, and bonuses for the Head of the Supervisory Board and Supervisors to the representative body of the owner as prescribed in this Decree.

d) Establish regulations, assess the degree of task completion, and decide on the remuneration level for management personnel representing capital contributions in multiple companies and businesses.

đ) Establish regulations for paying wages, remunerations, and bonuses to management personnel and report to the representative body of the owner before implementation.

e) Provide relevant documents and reports on the implementation of wage, remuneration, and bonus systems when requested by the Head of the Supervisory Board and Supervisors.

g) In the second quarter of each year, compile the wages, remunerations, bonuses, and average monthly income of each management personnel of the previous year to report to the representative body of the owner; publicly disclose on the company's website in accordance with the law.

2. Head of the Supervisory Board, Supervisors:

a) Inspect and supervise the implementation by the Board of Directors or Chairman of the Company, General Director, and Director in accordance with this Decree.

b) Advise the Board of Directors or Chairman of the Company, General Director, or report to the representative body of the owner when discovering non-compliance with national regulations.

3. Representative Body of the Owner:

a) In the first quarter of each year, receive, review, and approve the wage and remuneration fund for implementation of the previous year and the planned wage and remuneration fund for management personnel. For the wage and remuneration fund of the management personnel of the parent company of state-owned economic groups, the representative body of the owner shall approve after obtaining the agreement of the Ministry of Labor, Invalids, and Social Affairs.

b) Send to the Ministry of Labor, Invalids, and Social Affairs the approved wage and remuneration fund and bonus fund of management personnel of the parent company of state-owned economic groups, the parent company of special-class state-owned corporations, and state-owned corporations performing public service roles for consolidation and monitoring.

c) Establish regulations for evaluating the Head of the Supervisory Board and Supervisors; receive and manage the wage, remuneration, and bonus fund of the Head of the Supervisory Board and Supervisors remitted by the company; evaluate the degree of task completion and pay wages, remunerations, and bonuses to the Head of the Supervisory Board and Supervisors.

In cases where the Head of the Supervisory Board and Supervisors fail to complete their tasks, depending on the degree or violation, disciplinary measures such as not increasing wages, extending the period for salary grade promotion, deducting wages, remunerations, and bonuses, demoting salary grades, reprimanding, warning, dismissal, or termination of employment may be decided in accordance with the law.

d) Provide comments on the wage, remuneration, and bonus system of the company; publicly disclose the wage, remuneration fund implemented, the bonus fund, and the level of wages, remunerations, bonuses, and average monthly income of each company manager in the previous consecutive year on the electronic information page (Website) of the representative body of the owner in accordance with regulations, and simultaneously compile and send to the Ministry of Labor - Invalids and Social Affairs for consolidation and monitoring.

đ) Be responsible before the Government and the Prime Minister for implementing the wage, remuneration, and bonus system in companies under their management.

4. The Ministry of Labor - Invalids and Social Affairs:

a) Take the lead and coordinate with relevant ministries to guide the implementation of wages, remunerations, and bonuses as stipulated in this Decree.

b) Take the lead and coordinate with relevant ministries and sectors to submit to the Government for consideration and adjustment of the basic wage level for company managers to be appropriate to the reality of each period.

c) Participate in providing opinions for the representative body of the owner to decide on the wage and remuneration fund for the parent company's managers - Economic Group; coordinate with the representative body of the owner to supervise the wages, remunerations, and bonuses of the parent company's managers of Special-Class State-owned Joint Stock Companies and State-owned Joint Stock Companies performing important public service functions in the economy.

d) Take the lead and coordinate with the Ministry of Finance to issue standards for company ranking as the basis for determining wages and setting the basic wage level for company managers as stipulated in this Decree.

đ) Coordinate with the representative body of the owner to inspect, examine, and monitor the implementation of the wage, remuneration, and bonus system in companies. In case of discovering incorrect determination of the wage and remuneration fund, provide opinions for the representative body of the owner to instruct the company to adjust or settle according to regulations.

e) Compile the situation of wages, remunerations, and bonuses of company managers and report periodically to the Prime Minister.

5. The Ministry of Finance:

a) Take the lead and coordinate with relevant ministries and sectors to guide the establishment and management of the wage, remuneration, and bonus fund for Board Chairpersons and Supervisors as stipulated in this Decree; receive, manage, and pay wages, remunerations, and bonuses for Financial Supervisors paid by state-owned economic groups.

b) Coordinate with the Ministry of Labor - Invalids and Social Affairs to issue standards for company ranking as the basis for determining wages and setting the basic wage level for company managers.

Article 10. Effective Date

1. This Decree takes effect from August 1, 2016. The systems prescribed in this Decree shall be applied from January 1, 2016.

2. This Decree replaces Decree No. 51/2013/NĐ-CP dated May 14, 2013 of the Government prescribing the wage, remuneration, and bonus system for Members of the Board of Directors or the Chairman of the Company, Supervisors, General Directors or Directors, Deputy General Directors or Deputy Directors, Chief Accountants in limited liability companies with one member owned by the State.

3. For individuals appointed by the representative body of the owner as non-professional representatives of state capital in joint stock companies, after receiving remuneration and bonuses paid by the joint stock company, the capital representative must hand over to the representative body of the owner the portion of state capital to form a common fund and pay the capital representative according to the degree of completion of assigned tasks.

4. The Military Telecommunications Group continues to apply the pilot management of wages for company managers according to the provisions of the Government.

5. The Board of Directors or the Chairman of the parent company mentioned in Article 1 of this Decree shall organize the implementation of the wage, remuneration, and bonus system for managers of limited liability companies with one member held 100% of the charter capital based on the content prescribed in this Decree.

6. For organizations established and operating under the model of limited liability companies with 100% state-owned charter capital as prescribed by the Securities Law, the Law on Credit Institutions, the Law on Deposit Insurance, financial funds outside the state budget, and organizations handling state debts currently applying the wage mechanism of limited liability companies with 100% state-owned charter capital, based on the principles prescribed in this Decree, the Ministry of Labor - Invalids and Social Affairs shall guide the determination of wages, remunerations, and bonuses of managers linked to operational efficiency suitable to the special characteristics of these organizations, after reaching consensus with relevant ministries and sectors.

7. Political organizations and political-social organizations shall consider and decide on the application of the provisions of this Decree for managers of limited liability companies with 100% state-owned charter capital held by political organizations and political-social organizations.

8. Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairmen of provincial People's Committees directly under the central government, and the Board of Directors or the Chairman of limited liability companies with 100% state-owned charter capital shall be responsible for implementing this Decree./.