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Following is a question by the Hon Lee Wing-tat and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, at the Legislative Council meeting today (June 3):
Question:
The 2008 Annual Report of the MTR Corporation Limited (MTRCL) reveals that while the company's profits dropped substantially last year, the remuneration of its management and fees for its Board members were raised. In this connection, will the Government inform this Council whether:
(a) the government representatives on the Board of MTRCL supported the proposal of raising the remuneration of the company's management and fees for its Board members at the relevant Board meeting(s); if they did, of the justifications;
(b) it has looked into why MTRCL had raised the remuneration/fees of the aforesaid persons despite the substantial drop in profits;
(c) it knows the criteria adopted by MTRCL for determining the fees for its Board members; if it does, of the details; and
(d) the Government, being the major shareholder of MTRCL, has assessed if this increase in remuneration/fees has undermined public interest; if such an assessment has been made, of the details; if not, the reasons for that?
Reply:
President,
(a), (b) and (c) MTR Corporation Limited (MTRCL) has an established mechanism to determine the remuneration of its Directors and management. In determining its remuneration policy (including remuneration of its non-executive Directors, and the remuneration packages of its Chief Executive Officer and other members of the Executive Directorate), MTRCL will consider various factors including the Corporation's performance, responsibilities, scope of work, individual performance and remuneration paid by comparable companies, etc. In addition, the increase in the responsibilities and scope of work of its Directors and management as a result of the expansion in the business scope of MTRCL following the rail merger is also taken into account.
MTRCL's Board has established a Remuneration Committee, which is responsible to consider and recommend to the Board the Corporation's remuneration policy, to recommend to the Board the remuneration of the Members of the Board who are non-executive Directors and has delegated authority to determine and review the remuneration packages of the Chief Executive Officer and other Members of the Executive Directorate. The Chief Executive Officer and other Members of the Executive Directorate of MTRCL are not involved in decisions on any adjustments to their own remuneration. This mechanism has been established by making reference to the Code on Corporate Governance Practices at Appendix 14 of the Listing Rules in Hong Kong.
(d) As a listed company, MTRCL should operate according to commercial principles. MTRCL will operate in accordance with commercial principles in various aspects including its business development, daily operation and human resources (including the remuneration of its Directors and management). We understand that in determining the remuneration of its Directors and management, MTRCL has considered the relevant factors mentioned above, including relevant information relating to remuneration in the market.
Ends/Wednesday, June 3, 2009
Issued at HKT 11:30
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