The top 30 highest paid CEOs have been revealed, with bonuses making up a bulk of their total remuneration earned.
According to a salary review by Freshwater Advisers, which looked at companies with financial years ending in 2012 as well as March this year, the salaries of half of the CEOs listed were mostly made up of base salaries and annual cash bonuses or short-term incentives (STI), with little link to performance-related remuneration.
The report highlighted the fact that many companies on the list lacked long-term incentives (LTI), which could help organisations remain on a sustained growth path, The Business Times (BT) reported.
“LTI in theory should give the best alignment – usually equity and typically over longer periods,” Jon Robinson, managing director of Freshwater Advisers, told BT, however he was quick to point out this route not be hard to execute in practice.
“Many equity-based plans are very complex and motivation is diminished because people do not understand how the rewards are earned.”
The highest paid CEO on the list was DBS Group’s Piyush Gupta with S$10.3 million earned, which compromised of a S$1.2 million base salary, STI of S$3.5 million and LTI of S$5.5 million.
He was followed closely behind by CityDev’s executive chairman Kwek Leng Beng, and Wee Ee Cheong, deputy chairman and CEO of UOB, who both tied with a total of S$8.9 million each.
Kwek’s remuneration included a base salary of S$1.2 million and STI of S$7.1 million. He did not receive any LTIs last year, although he was paid S$532,500 in fees and S$88, 750 under “others”.
As part of his total remuneration, Wee received a base salary of S$976, 250, STI of S$5.3 million and LTI of S$2.3 million.
The report also found that STI payments were higher last year than they were in 2011, but Robinson added “many companies use PBT (profit before tax) as a performance measure for setting bonuses and we have looked at statistics that compare incentive payments to PBT”.
In 2012, the median STI was 0.61%, higher than the 0.41% reported in the prior year.
But although PBT is only one factor of consideration when doling out bonuses, he said “seeing bonuses trending up whilst profits are trending down does indicate an overall lack of alignment”.
Top 5 remuneration disclosures of corporate chiefs
CEO, DBS Group
LTI: S$ 5,538,000
Kwek Leng Beng
Executive chairman, CityDev
Wee Ee Cheong
Deputy chairman and CEO, UOB
Lim Kok Thay
Executive chairman, Genting Singapore
Choo Chiau Beng
CEO, Keppel Corp
Click here for the total list of the top 30 remuneration disclosures, as compiled by The Business Times.