Hong Kong bourse raises CEO’s annual salary to HK$9.3 million, before bonus and stock options

PUBLISHED : Wednesday, 13 June, 2018, 7:45pm
UPDATED : Wednesday, 13 June, 2018, 11:39pm

Hong Kong Exchanges and Clearing Limited (HKEX) has raised the salary of its chief executive by 3.5 per cent as it renews his contract for three more years, rewarding him for leading the 2017 overhaul in listing rules that could return the world’s fourth-largest equity bourse to pole position in the global race for fundraising.

Charles Li Xiaojia, a former JPMorgan Chase banker, will receive HK$9.35 million (US$1.20 million) in basic salary every year until 15 October, 2021, according to a statement. That pay scale doesn’t include a performance-related discretionary bonus and share options in the bourse operator, whose shares are listed in Hong Kong.

His contract renewal makes Li, 56, the longest-serving CEO on the city’s exchange. By the time his contract expires in 2021, he would’ve been on the exchange for 12 years, longer than any other job he has held in his career.

Another three years in the driving seat of the exchange “is the first step to work together” to reform and overhaul the system for companies to raise funds, said the HKEX chairwoman Laura Cha Shih May-lung, during a ceremony marking the 18th anniversary of the bourse.

“Charles’ achievements in the past nine years have been noted,” Cha said. “We’ll work together for more challenging times ahead. We are working on our next three-year strategy,” which will be announced in January 2019, she said.

The HKEX and Hong Kong’s securities regulator last year pushed through the biggest changes in the city’s listing rules in three decades to allow pre-revenue biotechnology research firms and technology start-ups with multiple classes of stocks raise capital. At stake was the title of the global capital for fundraising, which Hong Kong lost last year to New York, Shanghai and Shenzhen.

With new rules in place, HKEX is poised for a strong pipeline of blockbuster initial public offers (IPOs) by technology firms like Xiaomi and China Tower, and biotech firms like Hua Medicine, which could bolster Hong Kong’s place in the global ranks to regain this year’s crown.

Li, who started his working life as a journalist at China Daily newspaper, received HK$7.2 million in annual salary and HK$8.4 million in bonus when he joined the Hong Kong bourse in 2010. He was paid a total package of HK$48 million last year, comprising HK$9 million in salary, HK$15 million in bonus, and HK$24 million in retirement benefits and stock options, according to exchange filings.

Asked if he is happy with his raise for the next three years, Li said he would “go shopping”.

Charles Li’s 2016 bonus may be cut as HKEX turnover shrinks

By comparison, former HKEX chairman Chow Chung Kong received a total package of HK$3.14 million in 2015, while other independent directors at the bourse received between HK$700,000 and HK$950,000 in fees.

The stock price of HKEX has risen nearly 85 per cent during Li’s tenure, dipping 1.2 per cent in Wednesday trading to HK$257.60. The stock was listed in 2000 at an initial offered price of HK$3.99 per share.

Carlson Tong, the chairman of Hong Kong’s Securities and Futures Commission (SFC) was paid HK$1.01 million in the 2016 financial year. His pay is likely to remain unchanged in 2017, a source familiar with the regulator’s board told the South China Morning Post last year.

The Hong Kong Monetary Authority (HKMA) doesn’t disclose the exact remuneration of its executives. The city’s de facto central bank did disclose that its highest-paid employee – most likely chief executive Norman Chan – received between HK$10 million and HK$10.5 million in 2015, with a raise of 5 per cent from 2014. That made Chan the second-highest paid regulator in Hong Kong.

Chan and his HKMA senior managers are employed and assessed by Hong Kong’s Financial Secretary, based on a pay review by the government’s Exchange Fund Advisory Committee.