Temasek Holdings is not managing private/PAP funds but Singapore’s past reserves.
Strangely, the PAP government has designated Temasek an exempt private company where public funds are managed by PAP appointees and its real performance is known only to PAP’s inner circle.
Temasek has been beating around the bush with disclosure and dishes out meaningless figures. For example, Temasek does not even disclose the value of state assets transferred by PAP such as Singtel, power generation plants, Changi Airport Group, etc.
All these state assets amounted to more than $100 billion. The Buffet-like returns which Temasek claims therefore appears fake, unless of course Temasek is able to disclose the value of all state assets at the point of transfer.
Good governance warrants the disclosure of all material information which belongs in the public domain, such as management remuneration. Other SWF’s such as Norway’s Government Pension Fund Global (GPFG), managed by NBIM, has been disclosing the remuneration of top management – including its CEO’s, of course. 🙂
Last year, NBIM CEO earned less than S$1.3 million and he wasn’t the highest paid.
Why does Temasek fear such disclosure? Will it collapse or is it afraid of public backlash?
With regard to bonuses, Temasek has a complicated formula revolving around ‘wealth added’ (WA) by top management, which of course could be tweaked.
According to Temasek Review 2017 (pg 50), there was a “negative WA of S$44.7 billion for the year ended 31 March 2016“. Does this mean S$44.7 billion went up in smoke last year?
In 2017, Temasek own self computed a “positive WA of S$14.6 billion for the year ended 31 March 2017″. This is again strange considering its portfolio had hit a record high of $275 billion, wiping out previous year’s losses.
Perhaps Temasek would like to clarify on this funny WA formula to reward top management. 🙂
Temasek has also announced that it will be distributing the spoils:
To sum up the above:
Temasek has got to be kidding.
Singaporeans must not encourage PAP to allow past reserves to be abused; we are talking about billions of dollars, not peanuts. Temasek’s graphics has been designed to confuse. With a bit of editing, we can see through the smokescreen. TR (pg 51)
All this talk about WA is rubbish as can be seen from the image below. In 2009 and 2016, total WA was at least NEGATIVE $100 billion. All the positive WA added up doesn’t even come close to $100 billion.
Despite total WA being negative since 2008, billions in bonuses have actually been paid out in:
– 2008 during the global financial crisis,
– 2011 after a slight recovery
– and 2016 when WA was negative $44.7 billion.
In short, Temasek’s WA bonus formula was designed to own self reward own self.
All these clawback clauses essentially mean nothing because at the end of the day, employees are entitled to billions of dollars in bonuses.
Are bonuses of top management so obscene that Temasek fears political backlash with disclosure?