Should CEO still get FAT pay for this year?
Singapore's top CEOs get fat pay rises
Wed, Aug 27, 2008
The Straits Times
by Yang Huiwen
THE head honchos of Singapore's biggest companies pocketed fatter bonuses last year, thanks to the robust economy which grew by 7.5 per cent.
But slower economic growth expected this year could spell leaner times for some chief executives (CEOs) and other company bosses, market watchers say.
Last year, CEOs at Singapore's 30 listed companies that make up the Straits Times Index enjoyed pay rises of between 20 per cent and 150 per cent, the company annual reports disclose.
This was mainly due to an increase in the bonus component, which formed as much as 80 per cent of a CEO's pay package, up from 70 per cent.
Directors were also generously paid. Total directors' remuneration, in general, rose between 20 per cent and 80 per cent.
The data was culled from only STI component stocks as these are generally regarded as the bluest of blue chips in Singapore.
Topping the charts in terms of total pay to directors, including executive directors, was Hong Kong-based Noble Group, which supplies commodities including coffee, sugar, coal and steel.
It paid its 11 directors a total remuneration of US$32.63 million (S$46.1 million), almost double the sum it paid its 12 directors in 2006. This includes two executive directors.
This big jump reflected the boom in demand for oil and commodities last year, which also saw the pay of palm oil giant Wilmar International's CEO Kuok Khoon Hong more than double to as much as $1.75 million.
Noble Group did not disclose pay levels for the company's individual key executives in its annual report, arguing that such information is 'sensitive'.
However, based on that overall figure, it is reasonable to assume that founder and CEO Richard Elman could be among the highest paid CEOs of Singapore's listed companies.
Another big earner was Keppel Corp's CEO Lim Chee Onn, who beat the usual high-fliers among the banks to command the highest pay of the 30 companies, earning up to $9 million last year. This was up from $7.5 million the previous year.
The financial sector, which traditionally delivers the best bonuses, did not disappoint even as sub-prime related writedowns wreaked havoc on global financial markets.
The CEO of United Overseas Bank, Mr Wee Ee Cheong, and OCBC Bank CEO, Mr David Conner, both pocketed between $6 and $6.25 million. This was roughly a 60 per cent increase for Mr Wee, who took over the reins as CEO from his father Wee Cho Yaw in April last year.
Only two of the 30 companies gave their CEOs a pay cut.
DBS Group Holdings, South-east Asia's largest lender, paid its outgoing CEO Jackson Tai who resigned at the end of the year at least $500,000 less than what he got in 2006, where he was paid between $7.5 million and $7.75 million.
Singapore's No. 2 listed telco StarHub also shrank its pay package for CEO Terry Clontz by about $250,000 to between $3 million and $3.25 million. On the whole, total directors' pay at StarHub rose from $4.8 million to $5.2 million.
Industry experts say the marked rise in pay packages last year is justifiable and that the incentive structures that companies here use are comparable to their regional counterparts.
'There are significantly more regional-related executive roles being based out of Singapore as Singapore continues to attract more MNCs to set up regional headquarters in Singapore,' said Mr Tim Hird, managing director of HR consultancy Robert Half International.
'With the increased pressure, responsibility and shareholders' expectations placed on the CEO today, the CEO's role has now expanded to include accountability for corporate governance codes across the business,' he added.
The heavy emphasis on the bonus component reflects the greater emphasis on performance-based remuneration.
The CEO's rewards are typically based on a number of factors including company size, its bottom line, shareholders' returns and his or her performance.
Directors are individually assessed according to their performance, and their rewards typically take account of the firm's profitability, cost savings, operating expenses, corporate governance codes as well as shareholders' returns.
'CEOs are tasked with a formidable job of growing the company in terms of market share and revenue,' said recruitment agency GMP Group's CEO Annie Yap.
'The compensation and benefits package has to take into account the risks and responsibilities undertaken by these top- level executives.'
Looking ahead, Ms Yap said that this year's pay packets will depend on how well each company is able to ride out the slowdown in the economy.
Businesses which are being particularly hard hit may have their bonuses affected as companies become more cautious in their spending and adding headcount, said Ms Yap.
But CEOs in industries that have been spared the effects of the sluggish economy can look forward to modest pay growth of between 10 per cent and 20 per cent, she added.
Mr Hird expects companies with top performance 'to expect similar, if not an increase in percentage payouts in comparison to 2007'.
Singapore's top CEOs get fat pay rises
Wed, Aug 27, 2008
The Straits Times
by Yang Huiwen
THE head honchos of Singapore's biggest companies pocketed fatter bonuses last year, thanks to the robust economy which grew by 7.5 per cent.
But slower economic growth expected this year could spell leaner times for some chief executives (CEOs) and other company bosses, market watchers say.
Last year, CEOs at Singapore's 30 listed companies that make up the Straits Times Index enjoyed pay rises of between 20 per cent and 150 per cent, the company annual reports disclose.
This was mainly due to an increase in the bonus component, which formed as much as 80 per cent of a CEO's pay package, up from 70 per cent.
Directors were also generously paid. Total directors' remuneration, in general, rose between 20 per cent and 80 per cent.
The data was culled from only STI component stocks as these are generally regarded as the bluest of blue chips in Singapore.
Topping the charts in terms of total pay to directors, including executive directors, was Hong Kong-based Noble Group, which supplies commodities including coffee, sugar, coal and steel.
It paid its 11 directors a total remuneration of US$32.63 million (S$46.1 million), almost double the sum it paid its 12 directors in 2006. This includes two executive directors.
This big jump reflected the boom in demand for oil and commodities last year, which also saw the pay of palm oil giant Wilmar International's CEO Kuok Khoon Hong more than double to as much as $1.75 million.
Noble Group did not disclose pay levels for the company's individual key executives in its annual report, arguing that such information is 'sensitive'.
However, based on that overall figure, it is reasonable to assume that founder and CEO Richard Elman could be among the highest paid CEOs of Singapore's listed companies.
Another big earner was Keppel Corp's CEO Lim Chee Onn, who beat the usual high-fliers among the banks to command the highest pay of the 30 companies, earning up to $9 million last year. This was up from $7.5 million the previous year.
The financial sector, which traditionally delivers the best bonuses, did not disappoint even as sub-prime related writedowns wreaked havoc on global financial markets.
The CEO of United Overseas Bank, Mr Wee Ee Cheong, and OCBC Bank CEO, Mr David Conner, both pocketed between $6 and $6.25 million. This was roughly a 60 per cent increase for Mr Wee, who took over the reins as CEO from his father Wee Cho Yaw in April last year.
Only two of the 30 companies gave their CEOs a pay cut.
DBS Group Holdings, South-east Asia's largest lender, paid its outgoing CEO Jackson Tai who resigned at the end of the year at least $500,000 less than what he got in 2006, where he was paid between $7.5 million and $7.75 million.
Singapore's No. 2 listed telco StarHub also shrank its pay package for CEO Terry Clontz by about $250,000 to between $3 million and $3.25 million. On the whole, total directors' pay at StarHub rose from $4.8 million to $5.2 million.
Industry experts say the marked rise in pay packages last year is justifiable and that the incentive structures that companies here use are comparable to their regional counterparts.
'There are significantly more regional-related executive roles being based out of Singapore as Singapore continues to attract more MNCs to set up regional headquarters in Singapore,' said Mr Tim Hird, managing director of HR consultancy Robert Half International.
'With the increased pressure, responsibility and shareholders' expectations placed on the CEO today, the CEO's role has now expanded to include accountability for corporate governance codes across the business,' he added.
The heavy emphasis on the bonus component reflects the greater emphasis on performance-based remuneration.
The CEO's rewards are typically based on a number of factors including company size, its bottom line, shareholders' returns and his or her performance.
Directors are individually assessed according to their performance, and their rewards typically take account of the firm's profitability, cost savings, operating expenses, corporate governance codes as well as shareholders' returns.
'CEOs are tasked with a formidable job of growing the company in terms of market share and revenue,' said recruitment agency GMP Group's CEO Annie Yap.
'The compensation and benefits package has to take into account the risks and responsibilities undertaken by these top- level executives.'
Looking ahead, Ms Yap said that this year's pay packets will depend on how well each company is able to ride out the slowdown in the economy.
Businesses which are being particularly hard hit may have their bonuses affected as companies become more cautious in their spending and adding headcount, said Ms Yap.
But CEOs in industries that have been spared the effects of the sluggish economy can look forward to modest pay growth of between 10 per cent and 20 per cent, she added.
Mr Hird expects companies with top performance 'to expect similar, if not an increase in percentage payouts in comparison to 2007'.
