20150322 $20 million or probably more, Temasek must disclose CEO’s pay package

I refer to TRS article “Is the Singaporean taxpayer subsidising Ho Ching’s bonus” by Kenneth Jeyaretnam.

As stakeholders of Temasek Holdings, all citizens have the right to know not only the bonus of its CEO but the annual pay package of all its directors.

PAP is obligated to disclose the amount of reserves used to remunerate Temasek directors. Instead, PAP has privatised public funds and Temasek has no statutory obligation to disclose any information it prefers to conceal.

Last year, Temasek and the PMO refused to reply to my query on Temasek directors’ remuneration. Why? Is the remuneration so highly embarrassing if disclosed? After some research, I estimate Temasek CEO’s pay package to be at least $20 million. This is based on the following:

– In 2012, the compensation of DBS Group CEO Piyush Gupta hit a record of $9.33 million.
– In 2011, Keppel Corp CEO’s package totaled at least $11.6 million.

According to a post in 2010, Alex Au inferred from Temasek CEO-designate Charles Goodyear’s compensation at BHP and his highly educated guess was that Ho Ching was paid between $8 million and $24 million. That was more than a year after global stock markets had hit bottom in March 2009.

Based on Temasek’s portfolio increasing by $133 billion, group shareholder equity increasing $122 billion and Temasek operating on a commercial basis, Ho’s leadership role should earn her at least $20 million.

Recall the PAP rewarded its ministers with 19-month bonuses in 2008 after global stock market had collapsed. Since Temasek operates on a commercial basis, its CEO bonus should be nothing less than PAP’s 19 months.

Annual pay/monthly salary – 13 months = bonus

Similar to PAP, Temasek has an even more complicated remuneration structure which basically reveals NOTHING. Stated under its ‘Remuneration Philosophy’:

1 “Our base salaries reflect market benchmarks” – There are no benchmarks in dollar terms.
2 “..volunteered up to 25% pay reductions” – Again there are no specifics. Perhaps the CEO took only a 5% pay cut? Then again, if the base pay was reduced from a stratospheric level, similar to our ministerial pay, wouldn’t that be still high?

Temasek’s complicated bonus payout (similar to PAP’s policies in housing, CPF, etc) comprises the following:

1 Annual Cash Bonuses
2 Rolling S$ total shareholder return (%)
3 Wealth Added (WA) Bonus Bank – medium term incentive
4 Co-ownership Grants – long-term incentive
5 Co-ownership Alignment in Practice
6 WA Incentives of key team

After so much disclosure on its remuneration philosophy, Temasek has still not stated how much of our reserves have been paid to all its 500 employees and directors. $500 million? $1 billion? What exactly is Temasek trying to conceal from the public by publishing totally irrelevant information?

Totally irrelevant information even includes the weight profile of its staff ! Would any investor require this sort of information from the fund manager?

Why is Temasek unable to disclose remuneration figures when Norway’s Government Pension Fund Global (GPFG) publishes all the remuneration details of its directors? (below)

When GPFG, which manages more than $1 trillion, can afford to be totally transparent, does it not raise suspicions that Temasek has been concealing what’s probably embarrassing information?

In Temasek Review 2014, Temasek claims to have delivered annualised returns of 15% for investments made after 2002 whereas investments made prior to March 2002 delivered an annualised 11% since 2002. Coincidentally, Ho Ching became a director in May 2002 and CEO in January 2004.

It appears the stage has been set to reward its CEO par excellence with a generous amount of our reserves. Temasek could clarify but of course it wouldn’t.

In Kenneth’s article, he highlighted the construction of Changi Airport Terminal 5, which if transferred to Temasek for a nominal sum, will subsequently reap a huge gain for Temasek. He also mentioned that should Temasek CEO receive even “1% of the value accretion from floating CAG, this could be worth up to $500 million at some point in the future”.

Through zero effort, unless outstretched arms to receive our family jewels count, should any bonus be accrued to Temasek CEO or any directors?

If my grandfather gives me a house be bought for $50,000 40 years ago and the house was recently valued at $5 million, I can boast of a 12.2% annualised return or a $4,950,000 profit which is of course untrue. Alternatively, I could be humble and admit I never made the money because it was actually ‘Ah Kong’ money.


Temasek manages our reserves and every citizen has a stake in them. The remuneration of Temasek CEO should not be kept secret.

PAP has been totally opaque where the transfer of national assets to Temasek is concerned. Temasek has also gone to great lengths to prevent public knowledge of its CEO’s remuneration.
The poor corporate governance and PAP’s opacity are a cause for concern.

Based on PAP’s history of obscenely rewarding itself with out-of-this-world salary and bonuses, Temasek CEO’s pay package is estimated to be at least $20 million, probably more.

Temasek’s disclosure of its CEO’s pay package should not be seen as a favour to citizens or the Singapore parliament will risk becoming a laughing stock.

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14 Responses to 20150322 $20 million or probably more, Temasek must disclose CEO’s pay package

  1. Anonymous says:

    Keep going, Phillip. You are doing great. But just be careful with your language. You can be sure that they will go after you if you make the tiniest slip.

  2. Xmen says:

    I read Kenneth’s post and he wrote that “Temasek’s management, and in particular Ho Ching, the PM’s wife, are paid bonuses depending on Temasek achieving more than a hurdle rate of return, which is pegged to the cost of 10-year debt according to the Temasek annual report.”

    I find this troubling because the cost of 10-year debt is basically that of the government debt, which is definitely not the true cost of Temasek’s debt if it were a private entity. When S&P recently put Temasek and Greece in the same risk/liquidity bucket recently, Temasek was very upset perhaps due to the implied higher/true borrowing cost.

    They have been enriching themselves without public scrutiny. Hopefully the next government will do a complete (re)accounting of Temasek and claw back the undeserved (personal) gains. The guilty parties, if proven, should also go to jail.

  3. phillip ang says:

    Let’s hope justice is done. But we need people like Kenneth in parliament. Or Lim Jee Say. The WP has been a disappointment but now’s not the time to be divided.
    When the skeletons start coming out, I think all of us will be in for a shock.
    If you have the time, try scrutinising Temasek’s investments. They are not as fantastic as made out to be.
    It appears the PAP has bent backwards all the way to accommodate the Chinese in order to further our investment interests in China.
    Like what Jim Rogers said, we have gigantic amounts of money and not great investors. If bureaucrats make good fund managers, they would not need to beg voters at every election.

    • Xmen says:

      One more point on Temasek’s performance. We should not include domestic investments in calculating its performance. Questionable cost basis aside, many of its local entities also hold monopoly power, are protected from competition, and/or receive financial support from the state. This is abnormal in a real economy and it results in outsized gains at the expense of people.

      We shall instead compare their foreign investments to the MSCI EAFE index and see if they deserve their past bonuses.

  4. phillip ang says:

    Figures tell us most of the profits made in Singapore although by geography, we re only 31%. Most profitable – Singtel, DBS, PSA, Mapletree, SATS, Singapore Power, Keppel Corp, etc It looks like making money with local companies but losing overseas.
    Without govt backup and being a monopoly, they are likely to lose money.

  5. Xmen says:

    I just came across Chris K’s following comment at TRE. This is exactly what I alluded to when I mentioned Temasek’s gains was largely at the expense of people.

    From Chris K –
    “The one chart that is missing from this article is one which shows that wage share of GDP is 42% in Singapore and 51% in HK while the rest of OECD is averaged close to 60%.

    Quite clearly a disproportionate amount of national income accrues to capital. This shud not surprise becos the govt is a owner of capital through Temasek’s shareholding of the GLCs. And the GLC’s total shareholder returns exceeded wage growth many times over….

    …once the local pool of cheap labour is exhausted, the govt imports more cheap labour from abroad which then suppressed local wages. On the capital side, once CPF is formed to mobilize capital in the 60s and 70s, the cost of capital is then reduced by pegging CPF rates of return low. Damned good for business – cheap labour and cheap capital.

    On the other side of the ledger, unless rich or own capital, ordinary wage earning workers saw their wages suppressed and the earnings from CPF and personal savings low…”


  6. phillip ang says:

    Thanks. Read it. I believe this has been highlighted some time back..

  7. Ajak says:

    nepotism and cronyism at its best

  8. Michael Lee says:

    Dear Mr Phillip Ang….
    It ‘s great that u have detailed some of the operations in TH, in particular, some financial aspects which so far have been shielded from the public….
    I have been sitting on the fence for a long while…..until i noticed ST published an obscure report of TH writing off 23 billions with the stroke of a pen !
    I have been waiting for MPs to raise the issue in the parliament but till now, nothing of that has been raised….as though that is taboo !
    On the other hand, the comparatively minor issue of Ahpek ‘s 7m question has been debated almost every day by all parties….Im very upset…this is an understatement…..Please note that almost all the Singaporeans have learnt about Ahpek….however very few know about 23 billions being written off by TH…
    Mr Ang, I hope u can dig deeper into TH accounts and find out why such a huge amount has been quietly written off…..there goes our money !
    Thank you very much.
    Sincerely, Michael Lee.
    Mr Ang, I hope you can dig deeper into this matter and report accordingly in order to open up the eyes of all Singaporeans…..many know about Ahpek and WP ‘s shortcomings here…..but they know almost nothing about 23 billions being written off

  9. Frustrated says:

    Phillip, thanks for calling a spade a spade and mincing no words on the obscene salaries probably enjoyed by HC. Not only HC, but I think the whole Admin Officers which is part of “natural aristocrat” network is ripping us the taxpayers. How can the salary of a small country’s PM (USD1.7 mil in 2015) earning 4.25 times greater than president of US (USD400K), no matter how you try to justify it, it does not make sense. A fairer way is to benchmark his salary against ALL other politicans in the world, and probably HK’s CY Leung’s salary of USD575,595 in 2015 could be comparable. To incentivse PM, can adopt a matrix of vote share for his party say >65% in a GE be given 18 months bonus and be deposited into his CPF account, and not base his performance on GDP growth rate.

    In fact, the whole structure of the Admin Officer scale has been skewed towards “out of this market” pay structure to keep these Admin Officers happy at various pay scale. With the Great Financial Crisis, I believe their pay has been even more “unrealistic” compared to private sector since they have adjusted downwards. In fact, chatting with civil service friends have revealed that cost cutting has been going on for some time. Dept headcount freezed, new hires on contract, early retirement for non-natural aristocrat senior officials and outsourcing are not unheard of. I object to us paying more taxes to sustain the obscene salaries of these natural aristocrats, they have to cut costs first by reducing their no. as their salaries are unsustainable given the possible economic recession ahead.

    • phillip ang says:

      Thanks for the info.
      The majority of Singaporeans seem to think there’s nothing wrong with our demo-aristocratic model. 😦
      If PAP continues to hold absolute power, there will be no meaningful change and everything will continue to look good only on paper. No king/emperor/political party with absolute power has ever checked himself/itself.

  10. Afiq Aziz says:

    Whats the big deal. This lady intelligence have pumped billions of dollars into the economy. 20 million is nothing. If Temasek wants to recruit top talent to its company (which later pumps billions more into the economy) they have to pay competitively compared to other Investment Banker. Nobody would ever want to work on a investment company with unbelievably long working hours and yet you pay them so little. Its just not realistic. And lets face it, she really did transform Temasek and make it a big2 huge sovereign wealth company. Billions of dollars are pump into the economy because of her. So, is 20 million such a big deal?

    • Phillip Ang says:

      So long as anyone is earning tax dollars in a democratic country, even the smallest amount has to be disclosed regardless of performance. Temasek should not be run like a neighbourhood provision shop as though $242 billion of reserves belong to PAP.
      Without transparency, the figures provided by Temasek should not be assumed to be correct. At the least, Parliament should be able to scrutinise every investment. With 39% of unlisted assets, what are their true market values?
      Temasek’s returns are unverifiable and questionable. Why should a CEO with questionable returns be paid tens of millions by citizens of a country?

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