Singtel CEO increased shareholder value
I refer to the report, “Singtel chairman defends CEO pay hike” (June 24).
Netizens have been up in arms about Singtel chief executive Chua Sock Koong’s 19 per cent pay hike, on the basis that the increase in Singtel’s net profit and revenue both appear to pale in comparison.
The recent Gushcloud incident and mobile data services disruption would have also contributed to their impression of her performance vis-a-vis her remuneration.
Stripping away her total cash and benefits remuneration of S$5.6 million for Singtel’s financial year ended in March shows that her base salary was a third of this amount.
The remaining two-thirds was a variable bonus, more than half of which was — to use compensation consulting-speak — banked and deferred, to be paid out at a future time contingent upon the fulfilment of stringent, specific performance-related covenants.
Hence, it is subject to a clawback: The eventual payout could well be much reduced in the event of underperformance in future years.
Let us be reminded that a CEO’s job is to contribute in no small way towards creating and increasing shareholder value.
Incidents such as the two mentioned earlier no doubt impaired the customer experience, but should not detract from the credit due Ms Chua for having increased Singtel’s share value in a globally competitive industry and in challenging market conditions.
Singapore has a robust corporate governance framework, with processes in place to ensure a corporate culture of pay-for-performance, much like America’s Dodd-Frank Act.
While we want to prevent another financial crisis, let us also be balanced and informed, and see things in perspective without putting a drag on Singapore’s entrepreneurial drive.
