Hike in Singtel CEO's pay is not based on profits alone

I AM compelled to respond to Melissa Tan's report, Singtel CEO's FY2015 pay up 19% at S$5.6m (BT, June 23). It is important that our stakeholders and the public have a balanced and complete view of how we remunerate our CEO and senior management.

We have a pay-for-performance philosophy that measures and rewards short-term, mid-term and long-term performance. Short-term performance is measured through a balanced scorecard approach which rates individuals against financial and non-financial KPIs. Mid-term performance is rewarded by a value-sharing bonus which is dependent on the overall economic profit of the group i.e. excess return over risk-adjusted cost of capital. This is a true measure of value creation for our shareholders and is not linked in any way to the vagaries of the stock market. It is important to note that this bonus can be clawed back if Singtel does not continue to deliver sustainable value. Lastly, there is a long-term incentive scheme in the form of performance shares to reinforce the delivery of long-term growth measured by total shareholder returns in relative and absolute terms.

Singtel's total shareholder return for this year's award was 25 per cent compared to 11 per cent for the STI and 12 per cent for the MSCI Asia Pacific Telco index. Our compensation framework ensures an alignment between compensation and performance. The increase in total compensation to the CEO of 11 per cent (19 per cent cash component) reflects the out-performance against various plans and their targets, and not profits alone.