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LCQ18: Pay level of Airport Authority's Chief Executive Officer

     Following is a question by the Hon Emily Lau and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (December 17):


     In June this year, the Board of the Airport Authority Hong Kong (AA) announced the appointment of the new Chief Executive Officer (CEO) for a term of three years with effect from October 1, 2014. It has been reported that the remuneration package of the new CEO is very generous, with his salary plus bonus totalling nearly $10 million a year. In this connection, will the executive authorities inform this Council whether they know:

(1) the criteria adopted by AA for determining the remuneration package of the new CEO;

(2) how the annual salary of the new CEO compares with (i) that of his predecessor and (ii) those of the top executives of other statutory bodies such as the Urban Renewal Authority and the Hong Kong Trade Development Council; if the former is higher, the reasons for that; and

(3)  whether AA has included Chinese nationality as one of the recruitment criteria for its CEO; if so, the justifications, and whether this criterion was adopted in previous recruitment exercises for this post?



     Our reply to the various parts of the question raised by Hon Emily Lau is as follows:

     The pay level of the Chief Executive Officer (CEO) of the Airport Authority Hong Kong (AA) was endorsed by the Board of AA. The appointment of the CEO by the Board of AA was based on the principle of meritocracy, so that AA's particular needs could be met. The Board did not lay down any requirements on the nationality of applicants when it conducted the open recruitment of the position of CEO globally.

     Work of the AA at present and in future is both complicated and heavy. In addition to managing an international hub airport with continued growth in passenger and cargo volume, the AA has to take forward two largest infrastructural projects since the current airport commenced operations in 1998, i.e. the planning work of the third runway and the North Commercial District on the airport island. The AA, therefore, had to offer suitable remuneration to attract applicants with considerable experience in managing large organisations and with proven leadership capabilities to take up the position of CEO. When determining the remuneration of the new CEO, the AA took into account the local and global market conditions and the important responsibilities that the new CEO had to shoulder in the years to come. The personnel consultant that assisted in the recruitment also considered the pay level of the new CEO reasonable.

     In 2013-14, the basic compensation of the former CEO was around $4.32 million, while that of the new CEO will be around $6.12 million per year. The AA adopts performance-related compensation and the Board will determine the new CEO's actual remuneration after assessing his performance at the end of a financial year.

     Different statutory bodies, based on their needs and market conditions, recruit their senior executives with suitable pay levels. We do not consider it appropriate to compare their respective employment packages with that of the AA.

Ends/Wednesday, December 17, 2014
Issued at HKT 14:45


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