Executive Pay Excesses: Golden Handshakes & (Potential) Breach of Directors Duties in Hong Kong

Thursday 16 November 2017, 18:00 - 19:00

UCL South Wing Committee Room, Gower Street, London WC1E 6BT

Organised by the UCL Centre for Ethics and Law

Speaker:
Chee Keong LOW (CUHK Business School)

About this event
As there are no provisions in the Companies Ordinance in Hong Kong which govern the issue of ‘golden handshakes’, it is left to the directors of companies to determine if such termination payments are in the best interest of the company.  If a director is criticized by an independent board committee of ‘poor judgment’ as well as lacking the exercise of ‘critical judgment’, should members of the board of directors be held accountable if they sanction a contractual settlement which is later acknowledged as being ‘in lieu of the 12-month notice period’?

This seminar explores the circumstances leading to the resignation of Mr Jay Walder, the then Chief Executive Officer of the MTR Corporation Limited, from the office on 15 August 2014, a year earlier than scheduled.  Despite his failure in escalating certain crucial information to the board of directors to enable its making of more informed decisions, he was nonetheless provided with a ‘golden handshake’ of some US$2 million.  While such a payment is ‘immaterial’ against the profitability of the MTR Corporation, it nonetheless does cast aspersions over the aspirations of the government to promote Hong Kong as the ‘paragon for corporate governance in Asia’ given its status as the majority shareholder with approximately 77 percent of the shares in the company.

 

 

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