Critics question bonuses for hospital chiefs taking pay cut

PUBLISHED : Tuesday, 23 July, 2002, 12:00am
UPDATED : Tuesday, 23 July, 2002, 12:00am

Executives at the cash-strapped Hospital Authority receive a 15 per cent end-of-contract gratuity, which could more than make up for the pay cuts they have agreed to take, according to critics.

The Hospital Authority this month announced it plans to cut pay for its 50,000 staff by between 1.58 per cent and 4.42 per cent - in line with the civil service pay adjustments - from October 1.

Ahead of the pay cut, its 38 top executives, including five directors, volunteered to take an additional pay cut of eight per cent.

The Chief Executive, Dr William Ho Shiu-wei, will have his salary - estimated at between $3.75 million and $4.52 million a year - cut by 8.4 per cent, to between $312,500 and $377,500 a month.

The authority has declined to disclose more details about Dr Ho's package, or those of the other senior executives, who are on three-year contracts.

A spokesman said: 'The standard remuneration package of all authority staff who are employed on contract terms includes an end-of-contract gratuity, which comprises 15 per cent of the basic [monthly] salary.'

He said the salaries of some senior staff had a built-in performance-related element.

The end-of-contract gratuity was offered by other organisations, he added.

Legislator Dr Lo Wing-lok, who represents the medical sector, said the gratuities could be substantial, even if executives' salaries had been cut by up to 8.4 per cent.

He said the authority should be transparent about executive pay packages, considering the amount of taxpayers' money it received each year.

'The question I'd like to ask is: How about the bonus - if you cut 8.4 per cent and compensate them by giving a higher bonus, is that a real cut?' Dr Lo said.

Dr Leung Ka-lau, president of the Public Doctors' Association, questioned the necessity of paying the authority's chief executive a gratuity.

'The chief executives of commercial firms lead their companies to fight against their competitors,' he said. 'For the Hospital Authority, there is no need to fight because the government automatically gives it $30 billion.

'The only job he does is to distribute this money to various hospitals. I do not think it is a difficult job.'

Dr Leung said most of the 50,000 employees were permanent staff. Junior doctors earn at most $60,000 a month and so would be receiving a mere $27,000 at the end of their three-year contracts, he said.

Having recorded a budget deficit last fiscal year of $225 million - the first shortfall since 1991 - the authority nevertheless spent $23.6 billion on staff costs in 2001-02, about 83 per cent of its total government budget of $28.5 billion, according to its latest annual report.

For 2002-03, the authority's wage bill will be $25 billion, about 84 per cent of its budget of $29.9 billion. The deficit is expected to widen this year and to continue until at least 2005, the authority has said.

The authority's top five officials received remuneration packages ranging from $3 million to $5.25 million a year, according to its annual report 2000-01.



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