How equity became core for executive pay in Hong Kong

Jennifer Sun shares her insights on executive compensation.

Equity drives performance

Our report highlights how Hong Kong-listed companies are using equity to motivate and retain top talent:

• 27% of executive pay is equity-based: Key management personnel earned an average of 27.3% of their total compensation in shares in 2024. That's a strong signal that companies are linking rewards to shareholder outcomes.
• High-growth sectors lead the way: Healthcare and Information Technology companies, where competition for talent is fierce, allocated the highest share-based compensation, at 40% and 39% respectively. Equity is helping these firms attract and keep visionary leaders.
• Share options target top executives: Directors received one-third of all shares issued through option schemes in 2024. These plans are clearly designed to reward leadership and drive strategic execution.

Equity is more than just a reward, it's a commitment. It keeps leaders focused on long-term value, not short-term wins.

Governance matters

It's not just about how much equity is awarded. It's about how it's structured. Our data shows that companies are sharpening their approach:

• 32% of plans include performance targets: More companies are tying equity awards to measurable outcomes.
• 51% incorporate individual performance targets: That's up from just 16% the year before which shows a clear shift to individual targets from company/group levels. It means executives are being held accountable for their own strategic goals, not just broad company results.

This shift shows a move away from passive, time-based vesting. Instead, companies are using equity to drive real performance, linking rewards to metrics like relative total shareholder return (TSR), return on equity (ROE), and strategic milestones. Such an approach represents a prudent strategy to ensure executives act in the best interests of shareholders.

Conclusion

As Head of Computershare’s Employee Share Plans business in Asia, I observe a clear trend: equity is now the primary tool that Hong Kong-listed companies use to secure and motivate the leadership talent for future success.

The best-performing companies in the region are moving beyond traditional salary structures to build sophisticated, targeted equity plans. Key practises include:

1. Maximising skin in the game: Giving executives a material stake in the company's success
2. Driving accountability: Using precise performance targets to motivate action
3. Embedding governance: Linking substantial equity awards to long-term performance hurdles that meet shareholder and regulatory expectations

This is not merely about increasing management compensation. It's about making them true partners in company's success. Boards that strategically embrace and effectively govern their executive equity programs—supported by our world-class administrative expertise—will be the ones that deliver superior long-term shareholder value in Asia's highly competitive market.

Want to know how your plan compares?

Contact me to schedule a consultation with our team of experts who will help you benchmark your current equity strategy against the latest trends.