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dgment. “Currently, the independent directors of listed panies can be categorized as external directors,” Zhu said. “However, the definition of external director is much broader than independent director. Those who work for a pany which has business ties with a listed pany, though they do not meet the requirements of being an independent director, but can be considered an external director.” Additionally, the trial plan also stipulates that the salary mittee of listed SOEs that exercise the stock option incentive mechanism should be posed of external directors. However, for most of the listed panies, there are still non external directors. As a result, a considerable number of listed SOEs need to transform their salary mittee to fulfill the prerequisites of the stock option incentive mechanism. Avoiding overpensation Over pensation is something that the trial stock plan is trying to avoid as well. Therefore, the trial plan states that domestic listed SOEs’ executives should receive no more than 30 percent of their total salary (including options and dividends). But as for the overseaslisted SOEs, the maximum incentive is 40 percent of the target salary. The trial plan also fixes the volume of incentive stock options. The trial plan states that the volume of incentive stock options should be fixed in accordance with the scale of the listed pany and the number of incentive objectives. The number of share allocated may not exceed 10 percent of the pany’s total share capital and no less than percent. In fact, Beijing Review was informed by the CSRC that some 20 listed SOEs also began exploring stock option incentive schemes in the first half of this year. But none of them received approval from the CSRC because their schemes revealed sharp contrast with the trial plan in terms of the scale of incentive stock options offered. Resultsoriented Under the trial plan, better performance is a must to obtain stock privileges. The number of incentive stock options that senior executives in listed SOEs can get depends on their annual performance. If they cannot fulfill the targeted objective s