The remuneration structure is designed to ensure that there is an appropriate balance of fixed and variable rewards, which include both short-term and long-term incentives, and is weighted towards performance-related elements that take into account individual, functional and corporate performance.
Fixed component
- Base salary
- Base salary constitutes the major element of the remuneration package to attract and retain talent in a competitive market. It is determined based on the particular job responsibilities, duties and scope of each position. HKEX’s policy is for base salary to be positioned competitively against our peers, in order to attract the best and brightest talent.
Variable components
- Annual cash incentive
- Permanent employees are eligible to receive an annual cash incentive in recognition of their performance and contribution each year. Cash incentives are discretionary, and will vary year on year based on individual and company performance.
- Incentives are differentiated based on a 5-point performance rating scale. A performance development process is in place to help employees set performance objectives, focus on performance improvement, and identify training and development opportunities. Information about employees’ training is set out in the CSR Reports.
- Share award
- HKEX operates a Share Award Scheme for senior employees. The Share Award Scheme is a long-term incentive for key employees, including HKEX's Chief Executive, who are identified as essential to HKEX’s operations and future development. Awards granted under the Share Award Scheme vest in two equal tranches in the second and third year after the grant, acting as both a retention and risk management tool.
- Rules and announcements relating to the Share Award Scheme
- Details of awarded shares granted are set out in the financial statements.
- Clawback provisions
- From November 2020, variable components of the remuneration to the most senior level of executives of the HKEX Group are subject to clawback according to HKEX’s clawback policy.
Fringe benefits
- Provident fund
- For permanent employees in Hong Kong, benefits are offered through Hong Kong Exchanges and Clearing Provident Fund Scheme (a registered scheme under the Occupational Retirement Schemes Ordinance (ORSO) with the Mandatory Provident Fund (MPF) exemption). The ORSO scheme is a defined contribution scheme providing employees with investment choices. HKEX contributes 12.5 per cent of the employee’s base salary if the employee contributes 5 per cent, or HKEX contributes 10 per cent when the employee chooses not to contribute.
- For temporary employees or those permanent employees who elect not to join the ORSO scheme, a master trust MPF scheme providing retirement benefits is offered. Under the MPF scheme, HKEX provides contributions to each employee up to the statutory limit (ie, 5 per cent of the employee’s relevant income subject to a maximum of $1,500 per month).
- The Group has also sponsored a defined contribution pension scheme for all employees of HKEX Investment (UK) Limited and its subsidiaries. For employees who were employed before 1 May 2014, the Group contributes 15 per cent to 17 per cent of the employee’s basic salary to the London Metal Exchange pension scheme. For employees who started on or after 1 May 2014, they have the option to contribute a percentage of their salary toward the pension scheme, the company will then double match the contribution up to a maximum of 10 per cent as follows:
|
|
|
|
Employee's Contribution
|
Employer's Contribution
|
|
3%
|
6%
|
|
4%
|
8%
|
|
5%
|
10%
|
| |
|
| Additionally, employees who started on or after 1 May 2014 trigger automatic enrolment into the pension scheme. Any employee aged between 22 and State Pension Age with annual earnings above £10,000 will be automatically enrolled into the pension scheme in accordance with the UK legislation. |
- Pursuant to the relevant laws and regulations in the People’s Republic of China (PRC), the Group has joined defined contribution retirement schemes for the employees arranged by local government labour and security authorities. The Group makes contributions to the retirement schemes at the applicable rates based on the amounts stipulated by the local government organisations. Upon retirement, the local government labour and security authorities are responsible for the payment of the retirement benefits to the retired employees.
- Other benefits
- Other benefits include medical insurance, dental insurance, life and personal accident insurance, employee compensation and business travel insurance.
- For employees who are employed in Mainland China, statutory benefits including the mandatory housing fund and the social insurance are provided in accordance with the laws of the PRC.