Hong Kong Exchanges and Clearing's new boss, Charles Li Xiaojia, will receive an annual basic salary of HK$7.2 million, about HK$600,000 or 7.69 per cent less than his predecessor, Paul Chow Man-yiu, the exchange announced yesterday. Li, the first mainland-born chief executive of the exchange, takes the helm from 63-year-old Chow, who retired yesterday as the longest-serving chief executive of the bourse. Li's pay is lower than that of London Stock Exchange chief executive Xavier Rolet, whose basic salary is GBP650,000 (HK$8.22 million). The exchange said Li's compensation package was determined based on 'the level of responsibility, experience and abilities required of the chief executive and the remuneration offered for similar positions in the financial industry'. Li, 48, a former lawyer and investment banker, has no experience working as a regulator, but the exchange wanted to tap his mainland network and investment banking skills as it tries to expand its business. Li's pay may increase, since he can receive a discretionary performance-related bonus in the form of cash and shares. It will be determined by the exchange's remuneration committee and must be approved by the board. In 2008, Chow's take-home pay was HK$12.73 million, which included a basic salary of HK$7.8 million and a HK$3.9 million cash bonus, with the rest being his pension and other benefits. Last year, the exchange froze the basic salary of Chow and all other employees and has not yet announced staff bonuses. Li will miss the previous share option scheme, although he will be entitled to the award share scheme. The exchange had a share option scheme for senior staff, including Chow, but the plan was replaced by the share award scheme. The share option scheme granted senior executives a number of share options, and they could exercise the options for shares in the exchange after they worked a certain number of years. The award share scheme pays shares in HKEx as a form of bonus. Chow exercised all his share options into shares when the exchange's share price stood at about HK$19. He has not sold the shares and is now holding 3.3 million shares in the exchange worth HK$484.11 million, based on yesterday's close of HK$146.70. Besides a basic salary, Li will have a one-off HK$100,000 relocation allowance and a HK$750,000 special allowance for his loss of income during the sanitisation period before he joined HKEx. Li took a three-month break from his former job as chairman of JP Morgan China before joining the exchange to work with Chow to prepare for his new job. Chow, who headed the exchange from 1991 to 1997 and from 2003 until yesterday, met the media for a farewell photo on his last day on the job. 'I may do some charity and public duty job for a university,' he said of his future plans. 'If I am bored, I may take a part-time job, but there is no concrete plan yet. Finally, I want to say thank you to all those who have supported me for many years.'