SFC executives under fire over pay increase
Senior executives of the Securities and Futures Commission have come under fire for receiving pay increases despite the market regulator's earnings slumping 48.4 per cent in the past financial year.
A steep slide in income from levies on stock transactions and other fees due to the market slump did not stop senior SFC officials being awarded up to 22 per cent more in pay.
The regulator's annual report released yesterday showed its surplus dropped to HK$1.01 billion in the year to March from HK$1.96 billion in the previous year. The decline was mainly due to a 38.9 per cent drop in levy income on falling market turnover.
Levies, the major income source of the commission, fell to HK$1.3 billion while fees and charges paid by brokers, fund houses and financial advisers declined 20.4 per cent to HK$220.96 million.
Five of the six SFC executive directors received a fatter pay cheque, with deputy chief executive Alexa Lam receiving the highest raise of 22 per cent. That brought her income to HK$6.72 million from HK$5.49 million a year earlier.
Mrs Lam, who was named deputy chief executive on top of her role as executive director in February last year, also received the highest discretionary bonus of HK$1.22 million.
Chief executive Martin Wheatley pocketed HK$8.22 million for the year, a rise of 0.5 per cent.
Executive directors Brian Ho and Keith Lui both saw a rise of 4.6 per cent to HK$5.13 million.
Mark Steward, the director for enforcement who has been praised by market commentators for his crackdown on insider dealing, saw his pay increase 2.6 per cent to HK$5.54 million.
Chief operating officer Paul Kennedy was the only executive director to report a pay cut, with his salary falling 5.9 per cent to HK$6.03 million.
Sin Chung-kai, a deputy chairman of the Democratic Party and a former legislative councillor, said the increased salaries awarded at a time of depressed market conditions were 'totally unacceptable'.
'The commission posted a decline in its surplus so how can the top executives receive a pay rise?'' Mr Sin said. 'The SFC is a regulator and its executives' pay package should be linked with its regulatory performance.'
He said the Lehman Brothers minibonds fiasco, in which many retail investors had lost money because of mis-selling by the financial industry, had shown the commission was not fulfilling its duty.
'Under such circumstances, there is no reason for the commission to give a pay rise to its executives. It is outrageous,' Mr Sin said.
Other regulators have either frozen or cut staff bonus payments amid the financial crisis. Hong Kong Exchanges and Clearing, the front-line regulator for listed companies, froze salaries for all its staff this year and cut bonus payments last year by HK$86 million, down a third from the previous year.
The Hong Kong Monetary Authority also froze salaries and reduced variable pay - similar to a bonus - by 30 per cent last year.
An SFC spokesman said the salary package of the executive directors had been approved by Chief Executive Donald Tsang Yam-kuen and Financial Secretary John Tsang Chun-wah following recommendations by the SFC remuneration committee.