How much are CEOS in top Singapore-listed companies paid?
Remuneration packages of CEOS in Singapore are fairly modest in comparison to their global counterparts, according to Kumar Subramanian, partner for talent rewards and performance, Southeast Asia at AON. “For perspective, the CEO of an S&P 500 company was paid, on an average, around US$14M a year. If you look at Singapore-listed companies, only two or three CEOS would probably make that sort of figure,” said Subramanian.
For instance, the remuneration package of DBS CEO Piyush Gupta hit US$8.61M (S$11.68m) in 2018 which includes a US$884,592 (S$1.2m) salary; a US$3.31M (S$4.49m) cash bonus; and a US$4.50M (S$6.11m) share plan after the bank saw a record earnings year, DBS said in its annual report. Gupta’s pay is higher than that the 2018 remuneration of OCBC CEO Samuel Tsien US$7.89M (S$10.70m) as well as that of UOB CEO Wee Ee Cheong which hit US$7.78M (S$10.56m).
In contrast, CEOS in the largest companies in America made an average of US$18.9M in 2017, according to a study by the Economic Policy Institute.
In an interview with Singapore Business
Review, Subramanian discusses how CEOS in Singapore are paid, and the sectors that reward their senior executives more than their peers outside of their industry.
SBR: How much are CEOS from Singaporelisted companies paid?
KS: If you look at the CEOS of top 30 Singapore-listed companies, their compensation generally ranges between
$4m and $5m. This compensation includes the guaranteed salary which includes a base salary and, in a few instances, 13th-month bonus, which is essentially an extra one month guaranteed salary for that specific year. This is applicable only if the 13th-month bonus is practised throughout the organisation. Other forms of guaranteed compensation include various allowances, [AP style] that are paid in the form of cash.
In addition, there are long-term incentives. The incentive is a contingent award of shares. These shares will typically vest over a period of three or four years. To monetise the award, the CEO needs to stay in the company as an active employee and achieve certain performance conditions that will be attached to the vesting of the awards.
How have the salaries of CEOS changed over the past years?
Over the last three to four years, there has been a nominal increase in the total compensation of the senior executives of the top 30 Sti-listed companies. The base salary increases have been quite modest, at less than 2% per annum. A significant part of the increase, therefore, is a result of performancebased compensation.
How do CEO salaries differ across companies or industries in Singapore?
CEOS in the financial services sector get paid more than their peers outside of their industry, followed by the CEOS in the property development sector, and then broadly others. There are a few factors that drive the pay premium. Number one is the globalisation of the talent pool.
In Singapore, there are a number of global financial services firms that operate locally, and their compensation would be aligned with global standards. In addition, the mobility of senior management talent pool for financial services is increasingly getting globalised. You would not be surprised to see a leader who has run a fairly large business for a global financial services firm in Europe or in the US move to Singapore.
How do Singapore-based CEOS’ salaries shape up compared to other countries?
The CEO of an S&P 500 company, for instance, is paid, on an average around US$14M a year. If you look at Singapore-listed companies, very few CEOS would probably make that figure. But you can’t necessarily compare the salaries in absolute numbers and deduce any significant conclusions from that. It would be important to take the size, industry, performance and various other factors into consideration. Arianna Danganan