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Following is the transcript of a media session by the Chief Secretary for Administration, Mr Donald Tsang, on the Consultancy Study on the Remuneration Packages of Senior Executives of Statutory Bodies at the Central Government Offices today (January 4):
I would like to announce that the government will be appointing a consultant next month to review the pay structure for the Senior Executives of nine statutory organisations.
These statutory organisations are - the Securities and Futures Commission, the Airport Authority, the Urban Renewal Authority, the Hong Kong Tourism Board, the Kowloon-Canton Railway Corporation, the Mass Transit Railway Corporation Limited, the Hong Kong Trade Development Council, the Mandatory Provident Fund Schemes Authority, and the Hong Kong Monetary Authority. The study will also cover the subsidiaries of these bodies.
Earlier today, we have invited leading consultancy firms to submit proposals on the planned review. We will make the final selection as quickly as possible, so that the successful applicant can begin the study on schedule in February.
The aim of the review is to draw up a set of guidelines for use in determining and adjusting the remuneration package for the Senior Executives of each of these organisations.
The guidelines will ensure that there is full and long-term comparability with remuneration arrangements in the private sector. In other words, the adjustment mechanisms should be flexible enough to capture and reflect changing market conditions. The median salary points of the relevant private sector will be used as the benchmark. In undertaking this task, the Consultant will first examine whether the remuneration arrangements of these statutory bodies are broadly consistent with their counterparts in the private sector.
I must point out that these bodies need to follow private sector remuneration practices because their operations are commercial in character. They are required to work on prudent commercial principles in a competitive business environment. They are also required to compete with the private sector for highly-specialised human resources not readily available in the Administration. It is thus not appropriate for these bodies to follow the Civil Service pay determination and adjustment practices.
I expect the Consultancy will take about three months to complete. The Consultant will be required at the end of the study to propose a set of remuneration guidelines for each of the nine statutory bodies.
Once we have approved the guidelines, they will be passed to the governing boards or committees of the respective organisations for implementation. The guidelines will apply to all new appointments or re-appointments of the Senior Executives of these bodies. They will not affect existing contracts with incumbent Senior Executives. They will however apply fully when new contracts are negotiated with existing Senior Executives.
The Consultant will propose suitable arrangements for these statutory bodies to inform the Government and the public regularly of the remuneration packages of their Senior Executives.
You will recall that at the LegCo sittings on December 5th and 12th, I pointed out that there were over 200 statutory bodies in Hong Kong. They were established at different times and under different sets of circumstances. Nearly all of them are run as Government subvented bodies. As such their pay levels and policies follow those of the Civil Service. The nine statutory bodies proposed for the consultancy are the exceptions.
These nine statutory bodies are operating on prudent commercial principles. At present, most of them conduct regular pay surveys of the specific markets in which they compete for human resources. The remuneration packages for their senior management are determined by reference to the prevailing market wages. All this is in accordance with their current pay policies.
However, the Government appreciates the concerns expressed by the public and the Legislative Council about the remuneration levels and pay adjustment mechanisms for the Senior Executives in these statutory bodies. During the LegCo motion debate I undertook to examine how we might make improvements.
Although these statutory bodies are independent from the government, their operations and decisions impact on all the people's livelihood. The new guidelines aim to refine the existing pay mechanisms of these bodies, making them respond closely to changes in private sector wage levels and practices, and making them generally fairer, more competitive and more transparent.
I am delighted that the Chairmen and the Chief Executives of these nine statutory bodies have given their full support to the review. They will cooperate fully with the Consultant and implement the new guidelines to be evolved. The Government representatives sitting on these statutory bodies will ensure that the guidelines are properly followed.
Thank you.
Reporter : As these salaries were originally set and brought to the LegCo for approval on the basis of what the market would pay ? ...Is the money being spent on the consultancy to mean...because of political pressure ?
Mr Tsang : No. The consultants will try to establish what would be the fair market wage and at the same time it will find out what the median point would be and to see to what extent the practices in these nine statutory bodies might have deviated from them. I do not think we're trying to reinvent the wheel. But we want to demonstrate to all people in Hong Kong whether these senior executives in these statutory bodies have been fairly paid or whether they have been excessively paid. That is something, that is an answer which all people in Hong Kong, particularly the Legislative Council, wish to have.
Reporter : Are you going to use these salaries as a reference point for figuring out what the ministers should be paid under the new system ?
Mr Tsang : They are two separate exercises altogether. As far as I am concerned, these investigations relate to commercial operation, nothing to do with the Government sector as such.
Reporter : Has yesterday's criticism by the trade union an impact on...decision ?
Mr Tsang : We embarked on this exercise as a result of the debate in the Legislative Council. The debate took place in early December. So it has nothing to do with what happened yesterday. In fact, an exercise of this kind, as you might expect, would have required a considerable time of preparation.
Reporter : ...when you have a contract with these people, is it fair then...be re-assessing them...? Second, this would send out a message that the contract between the Government and the individual might be ... ?
Mr Tsang : No. I have emphasized in my statement the present survey will not affect provisions of existing contracts. In other words, existing contracts will not be affected in any way. But if there is a re-negotiation of contract, for instance, when a contract expires, and the relevant senior executive wants to extend the service in the organization concerned, then the guidelines would apply. But it would not abrogate the provisions of the existing contract. I want to emphasize again.
Reporter : ....when these people...their contracts run out and they seek to re-negotiate...?
Mr Tsang : I think I have said that the present salaries of our statutory bodies are broadly comparable with their private sector counterparts. The survey, hopefully, will verify that. But I am sure the survey will propose an improvement, which will be good for all concerned. But I do not want to speculate at this stage whether it will be higher or lower as far as the salaries determination is concerned.
(Please refer to the Chinese portion of the transcript)
Friday, January 4, 2002
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