Hong Kong finance executives face pay controls

Executives of financial services firms in Hong Kong will have limits placed on their remuneration next year.

The central bank of the special administrative region of China - the Hong Kong Monetary Authority (HKMA) - revealed that guidelines will be introduced in 2010 on the compensation packages awarded to banking executives in the region.

These rules, which will also apply to local branches of international institutions, will ban guaranteed bonuses not linked to performance and will ensure 60 per cent of director-level staff's pay is deferred for three years.

In a report, the HKMA explained that remuneration policies must be designed to encourage executives to comply with their company's risk management strategies.

A spokesperson for Hong Kong's central bank said: "The HKMA will expect authorised institutions to take prompt action to implement the guideline once issued, with a view to achieving full compliance within the year 2010."

These remuneration controls in the Asian state will follow a plethora of similar regulations implemented around the world, including Australia and The Netherlands.