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SINGAPORE: Southeast Asia's largest bank, DBS, will cut the pay of its staff by giving lower variable bonuses this year.
A DBS statement said variable bonuses in 2008 will be significantly lower than previous years amid the current global economic turmoil. The cuts will be tiered, with senior managers bearing the brunt of the reduction compared to the junior staff.
DBS did not say how much savings would result from the pay cuts.
DBS said its senior managers will get a larger "pay cut" as their variable bonus makes up a much larger proportion of total compensation. The lender's staff get a fixed monthly salary and variable year-end bonuses, which make up their total compensation each year.
Last month, DBS retrenched some 900 staff, mainly from its Singapore and Hong Kong operations, in a bid to position itself for the challenging business environment ahead.
At the time, the lender came under some criticism from Singapore's National Trades Union Congress. NTUC Secretary-General Lim Swee Say had said that DBS had not consulted its staff union about the layoffs.
Mr Lim also said the bank had not explored other cost reduction alternatives, and was using retrenchment as a first resort. In reply, DBS said that it had frozen hiring before deciding on the retrenchments.
According to DBS' latest annual report, its employees' compensation amounted to nearly S$1.4 billion in 2007. This was about 11 per cent higher than the year before.
- CNA/ir
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