Total cash compensation of Mainland China CEOs in A share companies increased by 5% (median) in 2009 during the financial crisis and by 12% (median) in 2010, according to Ernst & Young’s 2011 Mainland China and Hong Kong Executive Compensation Report. 

According to the report, there were significant increases in executive total cash compensation levels in both A share and Hong Kong listed companies in 2010. Compared to other developed Asia Pacific markets, variable  compensation, especially LTI, remained low in total compensation across all executive positions  of listed companies both in Mainland China and Hong Kong.

In the Hong Kong market, total cash compensation of listed companies’ CEOs increased by 19% (median) in 2010. 

In terms of compensation levels,  Hong Kong based listed companies paid much higher median total cash compensation to CEOs (RMB 12.7 million) than Mainland based listed companies (RMB 2 million) and A share companies (RMB 0.9 million) with similar market capitalization. The ratio is about 6 times and 14 times respectively. 

In terms of sectors, there were significant differences among sectors in both Mainland China and Hong Kong markets.

The finance sector had the highest median total cash compensation levels across all executive positions with RMB 2.16 million for CEOs in Mainland China. In Hong Kong, the real estate sector paid the highest median total cash compensation to CEOs (RMB 7.3 million).

Compared to other developed markets, Long-Term Incentive (LTI) was not commonly used in either market.  This was particularly true in Mainland China.

According to the Report, only 9% of A share companies had LTI plans and only 21% of these paid LTI awards in 2010. Generally, the average proportion of LTI in total compensation was less than 1% for executives of A share companies.

In Hong Kong, 67% of companies had at least one LTI plan in place; of these, only 29% granted LTI awards during 2010. The average proportion of LTI in total compensation was less than 10%, which was higher than that of the A share market, but lower than other developed markets.