Date
14 December 2018
Hang Lung chairman Ronnie Chan (right) gave Philip Chen a very generous parting gift even after the group's share price has halved. Photo: HKEJ
Hang Lung chairman Ronnie Chan (right) gave Philip Chen a very generous parting gift even after the group's share price has halved. Photo: HKEJ

Philip Chen got HK$270 million for eight years in Hang Lung

When it comes to rewarding his management team, Hang Lung Group chairman Ronnie Chan is no doubt generous.

Take the case of Philip Chen whom he had lured from Cathay Pacific eight years ago with a HK$20 million signing bonus.

Chan gave Chen, who stepped down as the group’s chief executive on Monday, a parting bonus of HK$40 million along with a one-year contract as senior adviser to the chairman for another HK$8.5 million while changing his role to that of a non-executive director.

All in all, the long-time Swire veteran and the first local CEO at Cathay Pacific has earned about HK$270 million in his eight years of service.

That is indeed a very generous compensation package, especially if one considers that Hang Lung’s shares have halved during Chen’s reign.

Despite Hang Lung’s “We Do It Right” motto, its bold investment shift from Hong Kong to the mainland appeared to have been ill-advised. 

The group’s HK$40 billion investment in China has yet to pay off as the rise of e-commerce saw its mega malls turn into eating rather than shopping venues.

Furthermore, Hang Lung sold some its Hong Kong assets way too early, thereby depleting its landbank, to finance its investments in the mainland.

Of course, it’s not fair to single out the chairman or the CEO to blame for the group’s poor share price performance because the board has long been advocating for the shift in strategy.

But it does make one wonder how much more patience shareholders should have before Hang Lung management, particularly Chen’s successor Weber Lo, could realize the group’s motto.

– Contact us at [email protected]

CG

EJ Insight writer

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