Hong Kong companies increasingly use shares to complement cash bonuses

In a city where many believe cash is king, a lot of employees focus on year-end bonuses or double pay at this time of the year. But an increasing number of companies are using share incentive schemes to supplement cash bonuses in order to retain and motivate their staff.

Read the annual reports of blue chips such as Hong Kong Exchanges and Clearing and HSBC Holdings and you will see that many senior executives are receiving shares instead of cash bonuses.

The managing director of Computershare's share-plan business in Asia, Seth Bohart, said many Asian companies were now following a trend in the United States and Europe and awarding shares rather than just cash to retain, motivate and attract talent. The trend has been particularly strong in China since tax and other regulatory clarifications in 2005.

Computershare, set up in 1978 in Melbourne and listed in Australia in 1994, has 15,000 employees and is focused on managing share registers and helping companies set up and manage their share-award schemes. It now serves 1,800 firms with 3.5 million employees worldwide offering such schemes, including more than 125 Hong Kong and mainland companies offering share plans to more than 115,000 employees.

Bohart, who was born and grew up in Colorado, studied finance at university. After graduating, he joined a technology firm in San Francisco in 1999. When his software company was taken over by Computershare, he was relocated to Hong Kong in 2005 to establish the company's Asian share-plan business.

In an interview in his office in Wan Chai, Bohart talked about the evolution of employee share schemes in the city and why some staff preferred stocks to cash.