How much are CEOS in top Sin­ga­pore-listed com­pa­nies paid?

Singapore Business Review - - FIRST -

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

Ku­mar Subra­ma­nian

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