Singtel joins growing list of firms in disclosing less detail of executive remuneration | Kerry Consulting

    Singtel joins growing list of firms in disclosing less detail of executive remuneration

    Kerry Consulting

    SINGAPORE – Singtel will disclose fewer details on how much its top executives earn because of “increasingly competitive conditions for talent in the industry”.

    The move, announced after the telco released its 2021 annual report on Wednesday (July 7), has disappointed some corporate governance watchdogs, who say “it is a step backwards” for the firm and transparency standards in Singapore.

    Associate professor of accounting Mak Yuen Teen at the National University of Singapore Business School noted: “For many years, Singtel was always regarded as one of the best governed and most transparent companies in Singapore, comparable to international standards.”

    He added that “with the world moving towards greater transparency in remuneration, such as disclosing the ratios of chief executive to average employee pay in some countries, Singtel should rethink this regressive move”.

    SingTel said its decision is in accordance with the 2018 Corporate Governance Code released by the Monetary Authority of Singapore.

    This requires listed companies to disclose the names, amounts paid to and remuneration breakdown of their chief executives and each individual director.

    Former Singtel chief executive Chua Sock Koong was paid $2.5 million in the financial year ending March 31, 2021, while her successor, Mr Yuen Kuan Moon, who took over on Jan 1, was paid $2 million.

    The code also requires companies to disclose the remuneration of at least the top five key management personnel in bands no wider than $250,000. Companies must also disclose in aggregate the total remuneration paid to these personnel.

    Firms are encouraged as well to disclose in full the remuneration of the top five key management personnel only as a best practice.

    Until recently, Singtel had been one of a dwindling list of public companies in the country to do this, disclosing the names, amounts and breakdown of its top five.

    The Straits Times understands that only the Singapore Exchange (SGX) and SATS continue to do so. SGX has indicated that it will still provide full disclosure in its annual reports.

    Prof Lawrence Loh, director for the Centre for Governance and Sustainability at NUS Business School, said there appears to be a trend towards disclosing less detail when it comes to key personnel remuneration.

    “For legitimate reasons relating to talent retention and commercial sensitivity, many companies have stopped providing full remuneration disclosure… and instead provide explanations on why they are not able to do so in their annual reports,” he said.

    Prof Loh noted that even some of the local banks in Singapore have also chosen to disclose less detail on senior executive remuneration, as it was deemed to be in the companies’ best interests.

    At a time when work can be conducted anywhere in the world and where skills are transferable across industries, finding the right talent has become increasingly competitive and providing too much detail could result in poaching among companies, which “creates animosity and is not healthy”, Prof Loh added.

    Mr Guru Mani, who leads the IT and telco practice at Kerry Consulting, said “scarcity of good talent is the root cause of why companies decide to avoid disclosing the exact remunerations of their top talent, as finding the right talent can be an arduous task”.

    He added that “although publicly listed companies may not be able to avoid disclosing the remunerations of their chief executives, they may choose to make the remunerations… less transparent to the public. This practice may become more common as the talent war continues.”

    Nevertheless, watchdogs maintain that Singapore’s listed companies should hold themselves to higher standards.

    Indeed, the Asian Corporate Governance Association has noted that Singapore has done poorly in some aspects of disclosure when compared with Australia and Hong Kong.

    Prof Mak said: “Singtel should aim for better than this. As one of the largest companies here with international investors, it should be benchmarked against global practices, not just the Singapore code.”

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