BDO study shows Hong Kong director pay doesn't translate into higher profits

A study comparing the salary packages of company directors with the earnings of their companies has shown that big executive pay cheques do not always translate into big profits.

The Hong Kong office of Belgium-headquartered taxation and accounting firm BDO used the financial results of companies in the Hang Seng Index for the financial year 2012 to calculate ratios of director pay to earnings per share.

Topping the list with the highest director pay per HK cent of earnings per share was snack-maker Want Want China, which last year paid its directors a total of HK$114.57 million and reported earnings per share of 32.598 HK cents. That meant it paid directors HK$3.51 million for every 1 HK cent they produced in earnings per share.

The second-highest pay level compared to earnings came from Lenovo, the world's second-largest supplier of personal computers, which paid its directors the equivalent of HK$2.78 million for every cent of earnings per share.

Hong Kong airline Cathay Pacific Airways came in third, at HK$2.19 million for every cent of earnings per share. Fourth was Hong Kong-based global trading group Li & Fung, at HK$1.83 million.

At the other end of the scale, Hang Seng Index shareholders getting the biggest bang for their buck paid to the directors of their companies were investors in China Shenhua Energy - the listed unit of the mainland's largest coal producer - which paid directors HK$13,436 for every HK cent they reported in earnings per share.