SAIC Motor Corp. has made headlines lately in the Chinese media for losing two of its star managers to other companies.

The incidents highlight a deep and growing problem with most state-owned automakers: the lack of incentives to keep valuable managers with the companies.

Unless the state-owned automakers address the problem, similar defections may follow.

It's not that executives of state-owned automakers don't have incentives to perform at exceptional levels.

Corporate managers often aspire to become senior government officials, the ultimate accomplishment in traditional Chinese culture. But this honor is reserved for the top brass of state-owned companies.

Two years ago, Zhu Yanfeng, the former chief of China FAW Group Corp., was named deputy governor of northeast China's Jilin province. And in 2010, Miao Wei, former president of Dongfeng Motor Corp., was appointed minister of industry and information technology.

So what is left for midlevel managers at these companies? Not much. It takes a painfully long time for executives at state-owned automakers to climb the corporate ladder.

To make matters worse, these managers can't expect to be paid well. A state-owned automaker typically is overstaffed and often can't afford the same salaries as global rivals operating in China.

Those factors prompted two prominent SAIC executives to jump to rival companies this month. 
Sun Xiaodong, SAIC's planning director, joined PSA Peugeot Citroen and Huang Huaqiong, head of international business of SAIC's passenger vehicle plant, bolted to join Beiqi Foton Motor Co., China's largest truckmaker.

The departure of Sun and Huang has caused jitters at SAIC. Fearing other managers will follow, SAIC is conferring with its owner, Shanghai's municipal government, about steps it can take to reward managers for good performance.

Private Chinese automakers such as BYD and Geely already grant stock options to managers. And international companies such as VW and GM will be hunting for accomplished Chinese executives to manage new production facilities.

To avoid a brain drain, state-owned automakers such as SAIC, FAW and Dongfeng must figure how to reward their managers for good performance.

To avoid a brain drain, state-owned automakers such as SAIC, FAW and Dongfeng must figure how to reward their managers for good performance. To retain their best executives for the long term, these companies may have to imitate their private peers and award stock options.

A talent war is brewing.