KCRC chief defends big bonus despite poor year

PUBLISHED : Sunday, 06 May, 2007, 12:00am
UPDATED : Sunday, 06 May, 2007, 12:00am

The KCRC chairman has defended the decision to award bonuses totalling HK$614,000 to senior executives despite a management feud and a faulty equipment crisis last year.

Michael Tien Puk-sun told legislators yesterday the corporation's board had decided to accept the results of a performance pay exercise because it was an 'objective mechanism' and managers involved in the two incidents had already been disciplined.

'We did consider whether to introduce negative publicity as a measure of performance but it was decided that it would be too difficult to implement,' he said.

Executives are paid a basic salary, plus performance pay and bonuses.

Six top executives of the Kowloon-Canton Railway Corporation were awarded performance pay for 2006 totalling HK$5.02 million and HK$614,000 in bonuses after the corporation's variable pay assessment found they had exceeded their targets for the year by 12 per cent. But legislators at a special meeting of the Legislative Council's transport panel questioned whether the exercise was robust enough. Miriam Lau Kin-yee, legislator for the transport constituency, said she was 'quite surprised' some passenger figures in the assessment exceeded the target for 2006 but were below that for 2005.

Democrat Lee Wing-tat said he was mystified that the 'major incidents' last year did not appear to form part of the score card for measuring managers' performance.

'The corporate image and also the way in which a corporation handles emergencies and incidents would count a great deal,' he said.

Albert Chan Wai-yip, of the League of Social Democrats, said: 'Your performance in 2006 declined in respect to the previous years. If you are giving such a high level of pay and the management board allows it, I think this amounts to negligence on the part of the management board.'

Mr Tien said targets had been relaxed to take account of possible delays in completing new rail lines.

The assessment also involved a quarterly survey of 4,000 people.

Last year, managers turned down their HK$1 million bonuses for 2005, which were distributed among staff. This year they decided to keep the bonus despite advice from transport minister Sarah Liao Sau-tung, who sits on the KCRC's managing board, to give it up because of 'possible negative public sentiment'.

Joshua Law Chi-kong, permanent secretary for environment, transport and works, said: 'We did suggest that we need to hold the management responsible for how they dealt with issues.'