SINGAPORE: Non-executive directors (NEDs) in
Singapore receive the second-highest pay among their peers in four
ASEAN countries, namely, Singapore, Malaysia, Indonesia and
Thailand.
This according to a report released by Hay Group,
the global management consultancy.
The report is based on an analysis on data collected
from 200 large companies in the four ASEAN countries from 2008 to
2010.
According to the report, at the median level, NEDs from large
companies in Singapore received a remuneration of S$95,000 in 2010.
Indonesian NEDs took the top spot at S$239,000 while NEDs in
Thailand and Malaysia received S$59,000 and S$58,500
respectively.
The Hay Group report also shows that the remuneration for NEDs
climbed steadily over the three years.
Singapore NEDs saw a pay increase of 9 per cent in 2009 and 2010.
In Malaysia, the increase was 17 per cent in 2009 and 3 per cent in
2010. Indonesian NEDs observed an increase of 13 per cent in 2009
and 10 per cent in 2010 and in Thailand, the increase remained
steady at 14 per cent in 2009 and 2010.
The top three sectors in Singapore for median average NED
remuneration are banks (S$152,000), followed by food (S$113,500)
and transportation (S$110,000). Banks in Malaysia, Indonesia and
Thailand also offer the highest pay to NEDs compared to other
industries.
The Hay Group report shows that the remuneration for NEDs in
Singapore's large companies is mainly composed of directors' fees
(92 per cent) and share-based compensation (8 per cent). In
contrast, benefits and perquisites are widely used for NED
remuneration in Malaysia, Indonesia and Thailand.
Benefits-in-kind in Malaysia account for a significant portion (30
per cent) of total remuneration for NEDs. These benefits-in-kind
include social allowance, car allowance, reimbursement, retirement
gratuity and others. NEDs in Indonesia and Thailand receive bonuses
which form a large portion of their total remuneration, with 52 per
cent in Indonesia and 33 per cent in Thailand.
Share-based compensation was not commonly used for NED remuneration
among the four countries. In Singapore, 10 out of the top 50
companies offer stock option plans for NEDs and 13 companies offer
full-value share plans for NEDs. Even fewer companies (less than 10
per cent) in the other three countries do likewise.
Gender diversity in board leadership remained low, with the
majority of the large listed companies in the four countries
lacking female NEDs on their boards during 2008 to 2010.
In Singapore, the percentage of companies with one or more female
NEDs on their boards remained largely unchanged at around 45 per
cent. The prevalence of female NEDs in Indonesia (around 30 per
cent) is the lowest among the four countries. In contrast,
companies in Malaysia and Thailand are making greater progress and
more than half of the companies have female NEDs on their boards in
2010.
The Hay Group report shows that, as at the end of 2011, the median
tenure of independent directors is seven years in Singapore, six
years in Malaysia, 4.5 years in Indonesia, and three years in
Thailand.
- CNA/cc