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The highest paid executive of a Hong Kong-listed company last year wasnt a high-flying financier or real-estate tycoon. It was Wan Long, a former factory manager who helped turn a humble state-owned meat processor into the worlds biggest pork producer — and in doing so built his own fortune. Compensation for Wan, chairman and chief executive officer of WH Group Ltd., was $291 million in salary and stock payments last year, according to the companys annual report.


The pork boss topped high-profile American CEOs like Apple Inc.s Tim Cook, Tesla Inc.s Elon Musk and Goldman Sachs Group Inc.s Lloyd Blankfein and was one of the best-paid executives anywhere in the world, according to data compiled by Bloomberg. WH Group — through subsidiaries Virginia-based Smithfield Foods and Chinese meat company Henan Shuanghui Investment & Development Co. — operates hog farms and factories in China, the U.S. and Europe and also sells consumer brands like Farmland bacon and Eckrich sausage.

Wans big 2017 compensation package wasnt a fluke. Between 2013 and 2017, he received at least $759 million in salary and stock, according to company filings. His direct and indirect holdings in the company, held via multiple entities, jumped dramatically from about 9 percent in the year of its 2014 initial public offering to about 19 percent last year, according to its filings. WH currently has a market value of about $15 billion.

For some corporate governance experts, the size of Wans compensation raises questions. “Its really a very amazing number,” said Roy Lo, managing partner at Shinewing Hong Kong, an accounting and consulting firm. “Compared with other listed companies it is very high.”

WHs director of investor relations, Luis Chein, said Wan deserved his 2017 reward for building its business and leading the $4.7 billion acquisition of Smithfield in 2013. The chairman has boosted profits and cut debt, and the board expects he will help the firm grow even more, Chein said. The company didnt make Wan available for an interview.

Large CEO pay packages have the potential to increase the risk of a popular outcry about inequality, and thus attract the attention of the Chinese government concerned about threats to social stability, said Oliver Rui, a professor of finance and accounting at China Europe International Business School in Shanghai.

As the number of Chinese billionaires grows, the issue of inequality poses a challenge to the ruling Communist Party. In his blueprint for economic policy, President Xi Jinping has made a priority of heading off social tensions by trying to narrow income disparities.

Wans 2017 compensation was more than the combined pay of the next 26 best-paid CEOs of Hong Kong-listed companies, according to Bloomberg data. Wan, who was born in 1940, started working at a government-owned meat factory in Chinas central Henan province in 1968 and eventually became the plants general manager. By 2007, the government had sold what was then called Shuanghui Group, which went on to acquire Smithfield and list in Hong Kong as WH Group in 2014.

The rapid increase in the size of Wans shareholding was exceptional, said Aris Stouraitis, director of the Centre for Corporate Governance and Financial Policy at Hong Kong Baptist University. “Thats quite unusual for any market, not just for Hong Kong.”

Over the years, stock awards helped boost his holdings as did other transactions. For instance, between July 11 and July 13, 2016, a company 90 percent owned by Wan bought 729 million WH shares for an average HK$3.35 per share, about 45 percent below market price, according to exchange filings. The company declined to comment on the transactions.

Shareholders will meet June 4 for WHs annual meeting, where one item on the agenda will be a vote on Wans proposed reelection to the board. In March, WH announced the appointment of the CEOs son, Vice President Wan Hongjian, to the board, effective at the conclusion of the annual meeting. The elder Wans big stock award comes at an awkward time, given the challenges WH now faces. China in March this year announced plans to impose 25 percent tariffs on pork imported from the U.S.

In April, the pork producer reported a 9.3 percent drop in operating profit for the first quarter of 2018, fueling a one-day 9.5 percent drop in its stock, which is now the 10th worst performer on the benchmark Hang Seng Index this year.

Wans 2017 award was granted under a 2013 incentive plan, which set aside about 350 million shares for future pay to executives, employees or advisers. That plan gave Wan and Deputy Chairman Jiao Shuge the right to select the terms and recipients, according to its filings. Jiao couldnt be reached for comment. On April 28, 2017, WH granted all of the shares to Wan and said in its annual report that management believed the financial target for vesting had been achieved.

WHs independent directors approved the award, according to Chein. Independent director Huang Ming, a Cornell University professor and head of the boards remuneration committee, directed questions to WH.

In addition to the stock payout, Wan also received a salary of $2 million last year. Based on the final dividend of 21 Hong Kong cents that the company approved on May 23, 2017, the shares he directly owned could have been entitled to at least $15 million.

By some measures, the pork company has performed well. Total borrowings were $3.2 billion in 2017, down from $4.7 billion in 2014. In that period, profits rose to $1.1 billion from $766 million. Shareholders, meanwhile, have had mixed results. At the time of the April 2017 pay award, the stock had totally returned 15 percent from its 2014 listing, outperforming the indexs 9 percent. But it lagged peers like Tyson Foods Inc. (up 78 percent) and Hormel Foods Corp. (up 62 percent).

“Usually the board will reward the CEO because of a good performance in the stock market, but thats not an impressive performance,” said Rui, the Shanghai professor. Although WH awarded the shares to Wan last year, he is required to stay with the company until 2019 in order to vest them, according to Chein.

The package was a reward for four years of performance, and a comparison of Wans pay last year with executives like Apples Cook was “invalid,” said Chein. Annual reports show Wan received separate stock payments each year since 2014. Cook, head of the worlds largest company by market value, had awarded pay of about $99 million including bonus and stock for 2017, according to the Bloomberg Pay Index. That included his salary, cash bonus and a portion of the $376 million equity award from 2011 thats part of a 10-year pay program.

Blankfein, one of the most powerful executives on Wall Street, drew about $25 million, including equity awards. Among American CEOs on the Bloomberg Pay Index, Wan was behind only Snap Inc.s Evan Spiegel for 2017.

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