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SingTel chairman Israel comes out to bat for CEO's pay policy
[SINGAPORE] Singapore Telecommunications Ltd defended the company's policy of rewarding its chief executive officer and senior management, with Chairman Simon Israel saying that total compensation is determined by more than profit alone.
"Our compensation framework ensures an alignment between compensation and performance," Mr Israel said in a one-page statement on Tuesday. "It is important that our stakeholders and the public have a balanced and complete view."
SingTel issued its 2015 annual report on Monday, including details of the remuneration of CEO Chua Sock Koong and senior staff. Ms Chua's total cash and benefits for the year to March 31 was S$5.59 million, including fixed pay of S$1.68 million and a variable bonus of S$3.83 million. Mr Israel said it's important to note that the bonus can be clawed back if SingTel doesn't continue to deliver sustainable value.
"The increase in total compensation to the chief executive officer of 11 per cent (19 per cent cash component) reflects the outperformance against various plans and their targets, and not profits alone," Mr Israel said. SingTel's total shareholder return for this year's award was 25 per cent, compared with 11 per cent for the Straits Times Index and 12 per cent for the MSCI Asia- Pacific Telco Index, he said.
SingTel reported a 3.5 per cent increase in net income to S$3.78 billion for the year ended March 31. Over the 12 months to Tuesday, its shares climbed 12 per cent to close at S$4.27, valuing the group at S$68 billion.
"As a large and complex business that operates across the region, our compensation is benchmarked against comparable businesses," Mr Israel said. "Three quarters of our earnings come from overseas and this diversification has helped create considerable shareholder value."
Ms Chua's pay was covered by local media on Tuesday. The public-relations department at SingTel wasn't immediately available after office hours on Tuesday and didn't respond to an e-mail asking for further comment on Israel's statement.
"We would encourage the media to take a considered view of remuneration matters in striving for higher standards of corporate governance in Singapore," Mr Israel said.