Posted by
crl
17 yrs ago
Hi,
My husband may be getting an offer for a 2 year job in Hong Kong (they just started talking to him so I don't know if they will really offer it to him or not).
So far the only compensation information we have is a salary offer of around $250,000 US per year, a housing allowance of $80,000 US per year and they will cover our mortage in the States for the 2 years.
What are other typical components of a compensation package? Should we expect moving expenses to be paid? Both coming and going? What about school for our son?
Anything else we should expect? Should they locate housing for us? A domestic helper? A school?
Thanks!
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Well its very difficult to say what the components of compensation package because there is no typical one. However what you should try to get as part of your package if you can, is some commitment for schooling for your child either fee's if he is going to attend ESF or agreement for purchase of the debenture if he is going to attend an international school (that is very important because its really expensive and ensures your son is at the top of waiting lists to get into the school for which there is a long list). You should definitely push for relocation expenses. Your housing is decent given they are also covering your mortgage back at home, but if you can push for more because housing is expensive and an US$80,000 allowance wont go as far as you think it would compared to the US. I wouldn't have your employer locate housing, you are much better of looking for one yourself that suits your purposes and taste. Domestic Helper costs are negligible US$500 per month, you can push for it if you want but it shouldn't be a deal breaker, to be honest I haven't heard of anyone getting it, but that doesn't mean its not given. I doubt your company would sort a domestic helper out for you. There are numerous people this board who can help you with agencies to go to, and as far as school goes, if you want your son to continue with a US education, you would be limited to HKIS for which you would require a debenture I would also push for fee's as it is not cheap. You could also try for flights home for holiday, but that is not typically given anymore though it used to be part of the package during the colonial days. Not really sure what else you could try for.
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Agreed with Digital Blonde - if you have kids, ask for kids education paid for, as anywhere in the world - is expensive. Car allowance? We have our utility bills paid by the company as well - a big one since AC will cost you a fortune a month.
Depends on what you are used to, as DB said $80,000 housing allowance wont go as far as you would think. It is just over HK$50,000 per month - not huge amount in the current market.
Another thing I would ask for is Club membership - again they cost a fortune and some companies offer them as part of package - if you have kids, a club membership is a great thing to have - it gets so hot that indoor playareas are much appreciated in summer...
Indeed, flights allowance.. that is about it? do move if you get a chance, it is a lovely place.
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Wow, that is a pretty good package. School debenture is a must. Hard to get even with $$$. My company will not arrange maid, and they are real easy and cheap to arrange so you may just want to do this yourself. Club package to Aberdeen Marina Club, HK Jockey Club, HK Football Club are also nice to haves.
Housing of $50k a month will get you a nice 1300 sq ft place in midlevels, Jardines Lookout or south side. It will also get you slightly larger if you go to other expat ghettos such as Sai Kung, DB and the in-demand place in W Kowloon.
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ltxhk
17 yrs ago
Many USA companies are no longer giving Club memberships; some complication with the US tax code. On the others, many still have memberships. It seems to be more and more a trade off with housing. If more $$ in housing, then one can rent a flat/ house with facilities such as pool, internal club house etc..... then a need for club membership is not as great.
For schools, it really depends on the age of your kids. If upper secondary, HKIS has a lot more spaces available than in primary years. ESF does not require debentures. Many schools just require a supplement on their school fees if you don't have a debenture. Companies without debentures aren't usually keen to buy them; so you should ask the situation. School fees are more often than not included.
For hk island housing, you may find $50k to be on the low side compared to what you are used to. 1300 sq ft is a city size flat. If you live in Sai Kung, CWB, DB (a bit far from HKIS), you can find something quite nice.
Cars are very common in packages. Moving expenses (both ways) is the norm. Helpers..... almost unheard of especially since this is not a legit tax expense.
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Club membership is a thing of the past if you ask me, it used to be prevalent pre 97 but now it seems to be reserved for senior management or for salary grade well above US$250,000 PA at least at the banks anyway.
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Wow it is really a complete different world. Must be Finance and Banking Industry, I guess? My husband is in the construction industry and was told salaries are even much lower than 3-4 years ago. Compared to crl's, it is even smaller than a peanut. Not jealous but just envious (^-^) (^-^).
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Mighty, the package is skewed, earning US$250,000 PA is hardly the average persons salary. If you lived in the US, you would be considered "wealthy" and probably in line for an increase in taxes under an incoming democratic administration.
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"Club membership is a thing of the past if you ask me, it used to be prevalent pre 97 but now it seems to be reserved for senior management or for salary grade well above US$250,000 PA at least at the banks anyway."
Indeed. In fact it's far far above USD 250k at most banks. There is also usually a requirement that it be a "customer facing" position.
"Cars are very common in packages. Moving expenses (both ways) is the norm. Helpers..... almost unheard of especially since this is not a legit tax expense."
Helpers are a relatively small expense in these contexts anyway. Note "relative".
Components can include, in approximate descending order of probability (as I see it):
- Housing.
- Moving of household.
- Travel.
- Medical/dental/vision insurance.
- Cross-cultural training.
- Language training.
- Housing search and contract fees.
- School fees (sometimes only for children over 5)
- Guided reconnaissance on arrival.
- Tax preparation assistance. Very useful.
- Professional management of housing in home country (typically for rental)
- Trips "home" once of twice a year.
- Reconnaissance trip.
- New appliances allowance.
- Car allowance.
- Utilities allowance.
- Club membership.
I would say cross-cultural training is very useful, especially if you haven't been abroad before. So is the reconnaissance and housing search. You can really ply those people with questions. ;)
"For hk island housing, you may find $50k to be on the low side compared to what you are used to. 1300 sq ft is a city size flat."
Indeed. And note that this includes 15-30% "shrinkage" since they count common areas. Also that typically includes a maid's room+bathroom.
While we're commenting on salaries, USD 250k is in fact nothing huge in investment banking for a mid level manager. It must be said though, that these people tend to work very hard in a very demanding environment.
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crl
17 yrs ago
Thank you all very much for the information and feedback!
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ltxhk
17 yrs ago
Packages really do depend on which industry one is working in. Finance/ Banking is a world onto its own here (like NY and London). If you are in another industry such as manufacturing, pharmaceuticals, advertising, trade etc..... terms may include housing that is greater than salaries. Every industry has their strengths and perks, but since the salaries/ bonuses may not be as high as the bankers a lot of other industries do provide the perks of club membership for upper-middle and above. Regardless of one's employer, the hours are long in HK for most.
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They may work hard in Investment Banking, but its usually an overinflated sense of ego right up the heirachy that also contributes to those that are working in the industry having over inflated packages.
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"Regardless of one's employer, the hours are long in HK for most."
Long, yes. Longer than in the US or UK, not really. The locals in investment banking certainly work late but the hours are a bit shifted compared to "Western norm". They tend to come in rather "late", around 0900-0930. They also tend to take a 2 hour lunch. Even if they then work until 2200 that is still a shorter day than a more Western style office worker coming in at 0800 and working until 2000 with a 15 minute lunch break.
This is from observation at two banks. Your results may vary.
"They may work hard in Investment Banking, but its usually an overinflated sense of ego right up the heirachy that also contributes to those that are working in the industry having over inflated packages."
I don't agree. The market simply offers those salaries. If companies could get away with offering less they would.
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Speaking as someone who works in the business, First of all the market is distorted, At the top there is a tendency to allocate profitability with very few individuals who are considered rain makers, when in fact particularly in areas such as corporate finance the actual work that gets done is extremely team orientated. Rain makers would get no where if they didn't have an execution team backing them up. Bonus which makes up the majority of a salary package at an investment bank is determined by perception. Your Bosses decide how much to allocate individuals out of a bonus pool and how they do so, is soley Dependant on how important they perceive your contribution to have been towards profits made which is fair enough. But If you want a good bonus, its critical to be self important and have an over inflated ego, that way the perception exists that your contribution was vital towards this years profits. Those that cannot project that kind of image get screwed on their bonus. That is why for some the industry offers over inflated packages in my view.
You have to remember in the business that there are no real physical costs that it is human resource dependant. Salaries and Bonus's make up the vast proportion of costs on a P&L and with over 3 -5 billion US dollars a year in quarterly profits at a top bank, its difficult not to make the case that your main resource shouldnt be compensated well, a system like that is almost certain to be completely distorted and warped in many ways, Some People are way over paid, and others end up not receiving their fair share and that is all down to your line managers at your company arbitrary perception of your contribution and the perception of line managers at other banks which may consider head hunting you. Its different in sales and trading, more equitable I feel. But the system is fraught with pitfalls, and unfortunately there is very little that can be done about it.
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guys, there are a lot of companies that include club membership in package (well at least i know quite a few people) - so is worth asking for it - the worst that can happen, they say "no", right?
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Digital Blonde, plenty of banks have peer review systems that have a big impact on bonuses. Ego may get you far. Results get you far too.
If it were easy, anyone could do it. It's not easy.
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Mate, Bonus time is the most warped experience one can go through and perception is everything. My house just poached a whole team in New York lock stock from another house, 12 guys in total all with guaranteed bonus of US$ 6 million a year, and they do exactly what I do which is sweet FA and the reason I have the time to post here. The perception is that they make the moolah in the market I work in, which is probably true, but I can assure you, its really not hard work. There are lots of jobs in the industry which do require lots and lots of hard work, particularly if you are a first year analyst and or on the investment banking side, you really have to sweat, but the higher up you go, the more responsibility you have and the less work you actually do instead delegating and the more you get paid which is actually true of most if not all industries and there is nothing wrong with that.
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"but the higher up you go, the more responsibility you have and the less work you actually do instead delegating and the more you get paid which is actually true of most if not all industries and there is nothing wrong with that."
Exactly, so it is _not_ about ego and projecting image (althought that migth play a small part in the promotion trajectory).
To clarify: FA as in financial advisory, but not on the IBD/CorpFin side? So would this be wealth/investment management? Just curious.
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mayo
17 yrs ago
FA is financial advisory? I thought it was "sweet @%#$ all." Back to the original question my husbands package includes moving expenses, a looksee trip, 2weeks accommodation while we house hunted, agent fees, a one off lump sum for replacement of electric goods etc, monthly housing allowance, monthly cost of living allowance, schooling for children from primary onwards, club membership, car and a home leave allowance once a year. In my opinion all aspects of expat packages other than rent allowance seem to be getting smaller. My husbands company originally provided us with business class fare for home leave but alas we have since been bumped back with all the other sardines.
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At mid level management its all about projection and perception you work as part of a team which works on multiple deals you need to be perceived as being influential to those deals, the higher up you go the more responsibility you have and that usually comes with its own P+L if you are a department head, so its pretty obvious how good a manager you are from your figures.
and FA means swear word beginning with F All, not financial advisory (I mean I do work obviously, but its not nearly as taxing as those in IBD, no 20 hour days here). I work in sales and trading which is different from IBD because individuals have their own P+L so its much easier to measure someones performance but it comes with its own headaches which differ substantially from IBD. And to correct the previous post, the guys we just hired have guaranteed bonus over three years not US$6 million per year as previously stated, but the point is the same we hired them and guaranteed their bonus on the perception of their profitability.
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Mayo,
A monthly cost of living allowance sounds very similar to a salary, unless the allowance is negligible I really don't know many people on expat packages that have an additional perk related to cost of living allowance which is substantial that should be part of your salary (may be for the first few months, but certainly not for the duration of the contract). You sure managed to maximize your benefits there with your employer. I had a friend who came over for Coke as their top most guy in Hong Kong he got everything and a hardship allowance which lasted for only a few months.
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Cost of living allowance makes perfect sense. It acknowledges the fact that cities differ in cost of living apart from housing. For example HK is much more expensive than, say, New York when it comes to food and electricity.
If you make it part of the salary, that salary increase would be retained at the end of the contract. This way when the worker goes "back" home you just take it away and there's "less fuss".
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