Some listed companies give fewer details on CEO pay

Reluctance to reveal more could be due to fear of poaching



EXECUTIVE pay has always been a delicate subject - and now some listed companies are failing to give investors any meaningful idea of how much their head honchos get paid.

The annual general meeting season is under way, and shareholders are weighed down by heavy annual reports crammed with reams of sometimes obscure data.

But some listed companies have decided to go light on detailing how much their top bosses earn, a check by The Straits Times has found.

The Singapore Exchange's listing manual says the pay of directors should be disclosed within $250,000 bands. So a firm would say that a boss earns between $500,000 and $750,000, for instance.

Some larger listed companies go a step further, and disclose the exact level of pay.

For example, shareholders of Singapore Technologies Engineering know the pay of chief executive officer (CEO) Tan Pheng Hock to the nearest dollar - $2,802,266.

Even a market minnow, ornamental fish breeder Qian Hu has revealed that its CEO, Mr Kenny Yap, is paid $187,000.

The practice of most companies is to disclose within $250,000 bands.

But at two medical firms, Raffles Medical Group and Parkway Holdings, the upper limits of the bands seem to have gone missing.

Raffles Medical's executive chairman, Dr Loo Choon Yong, was said to have been paid '$500,000 and above'.

On another page of the annual report, the directors' remuneration figure is assigned $3.1 million. It is not clear how many directors there are in this category - but it may refer only to Dr Loo.

He is the only director who gets a pay package. The others get only fees.

If this figure covers only Dr Loo's remuneration, then that would be a far cry from the $500,000 figure.

Similarly, Parkway's managing director, Dr Lim Cheok Peng's package was described as '$750,000 and above'.

Making an educated guess about his package is even more difficult, as there is a separate figure of $8.9 million found under 'key management personnel compensation'.

It is far from clear how many directors and/or management personnel are included in this number.

The Code of Corporate Governance - a voluntary code only - encourages listed companies to give the specific level of pay of directors plus the top five key executives who are not directors.

One possible reason for companies hesitating to disclose meaningful details of the pay of their top five key people who are not on the board is the fear of losing them.

As Raffles Medical put it in its annual report: 'Disclosure of the remuneration of individual executives who may also be clinicians is disadvantageous to its business interests, given the highly competitive industry conditions, where poaching of executive has become commonplace in a liberalised environment.'

However, one analyst said that such pay information could not be that sensitive as another listed hospital - Thomson Medical Centre had provided the information.

For its top five executives, it listed their names and indicated that its group CEO was earning $500,000 and above although there was no upper limit given.

It also revealed that its executive chairman, Dr Cheng Wei Chen - who holds the equivalent position of Raffles Medical's

Dr Loo and Parkway's Dr Lim - was paid between $250,000 and $499,999 for the year ended Aug 31, last year.

One headhunter said that not disclosing pay because of poaching fears is irrelevant. 'If someone is open to opportunities, he will be disclosing his pay package when he meets the potential employer.'

In fact, the headhunter added: 'If a company is very interested in approaching a candidate, they will still want to talk to him, whatever his package.

'They will focus more on what his contribution is to the business growth. His package will be only one factor.'

Some observers say Parkway and Raffles Medical are less in the investor spotlight than local banks, for example, and so do not need to stretch themselves on the disclosure front.

But both are already sizeable companies - with market capitalisations of $520 million and $2.7 billion respectively.

Thomson Medical Centre has a market capitalisation of only $165 million.

Associate Professor Mak Yuen Teen, a corporate governance commentator, pointed out that under Hong Kong's listing rules, each individual director's remuneration has to be disclosed.

There are risks if directors' pay is not fully disclosed. For one, 'without proper disclosure, there is a risk of inflated remuneration'. There are fewer checks and balances, as the pay of a director who is an executive is not subject to shareholder votes.

Prof Mak added that 'disclosure of remuneration levels and mix is important as part of ensuring that remuneration is competitive, but not excessive'.

He added that more can be done in this area, especially in the area of 'what performance targets are used for senior management'.