Directors' pay improves but still lags 10 years behind US

Independent directors of Hong Kong listed companies are taking home twice as much pay as they were five years ago, though they still have a long way to go to catch up with their counterparts in the United States.

The local average reward for independent directors last year was $160,000, according to executive search firm Korn/Ferry International's latest Annual Board of Directors Study.

'Hong Kong directors get much better remuneration now because they have to take on more responsibilities and the regulatory requirements are tougher. The risks associated with being a director are much greater,' says Andrew Tsui Pui-yan, a senior client partner and managing director of Korn/Ferry's Hong Kong office, who is our guest on this week's podcast.

'Even so, what Hong Kong independent directors receive now is only what their US counterparts were already receiving 10 years ago. Today, US directors on average get US$70,000 a year, or $500,000 in local money. There's a lot of room for Hong Kong to catch up.'

He says many listed companies now turn to executive search firms to help them find the right candidates. 'Gone are the days when you could recruit your dentist or your golf partner to serve on your board.'

Korn/Ferry, which recruited the current chiefs of Ocean Park and the Hospital Authority, began its annual directors study 32 years ago. It is considered the most comprehensive of its kind.