CEOs of Singapore's Big Three banks paid 9-24% less in 2020 as Covid-19 hit profits

THE chief executives of Singapore's banking trio drew lower salaries in 2020 as the pandemic took a bite out of banks' earnings last year.

Outgoing OCBC chief Samuel Tsien took home a total salary of S$8.6 million in 2020, about 22.5 per cent lower than S$11.1 million in 2019, the bank's annual report showed on Monday.

Mr Tsien's remuneration for 2020 comprised a cash bonus of S$4.38 million, deferred shares worth S$2.92 million, other benefits of S$84,699, and came on top of his base salary of S$1.24 million. The base salary was largely flat from the previous year.

The value of remuneration shares was estimated based on OCBC's closing price of S$11.73 per share on March 12, 2021.

Key global megatrends impacting Asia's growth were outlined in the annual report, which include rising Asian wealth, increasing China dominance, digital prominence and threats, as well as sustainability.

In the report, Mr Tsien noted that Asia is expected to retain its lead as the fastest growth region in 2021, led by China as the main engine of growth. Gross domestic product growth in OCBC's key markets of Singapore, Malaysia, Indonesia, Hong Kong and the Greater Bay Area will create new opportunities for banking, he said.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

He also cautioned that the geopolitical contest between the US and China could reflect a more "measured tone", but the underlying strategic rivalry is expected to remain intense and cast a dampener on business confidence.

OCBC global wholesale banking head Helen Wong, who will succeed Mr Tsien from April 15, noted that trade tensions could in fact deepen collaboration and quicken the pace of development as China focuses more on domestic consumption and its connectivity with Hong Kong, Macau and Asean.

Businesses in the Greater Bay Area could tap domestic consumption, an important catalyst for growth, as the surrounding region becomes more integrated in the future. On its own, the region can function as an integrated supply chain, said Ms Wong in the report.

"Given OCBC's presence in Hong Kong, Macau and the Guangdong region, and the southern part of mainland China where Shanghai is our headquarters - as well as our wide geographical coverage of Asean where Singapore has been our home base for more than 80 years - we continue to see tremendous opportunities," she said. The 59-year-old was chief executive of HSBC in Greater China before returning to OCBC in 2020.

In UOB's annual report last Friday, its chief executive Wee Ee Cheong recorded a total salary of S$9.81 million in 2020, down 8.8 per cent from S$10.75 million in 2019. His base salary remained unchanged at S$1.2 million.

Mr Wee received S$8.568 million in bonuses, and S$37,000 in benefits-in-kind and others. As before, 60 per cent of the variable pay due to Mr Wee will be deferred and vest over three years.

DBS Group's chief executive Piyush Gupta's pay fell 24 per cent to S$9.18 million in 2020. His total compensation in 2019 was S$12.13 million, which equates to a difference of about S$2.94 million in the amount received last year. This is Mr Gupta's 11th year with South-east Asia's largest bank by assets.

In the annual report, the bank said the drop in the bonus was attributed to the difficult operating environment, general cutbacks adopted across the bank and the reduction in the lender's profits by 26 per cent. This was due to a quadrupling of provisions as general allowances were set aside for asset quality risks arising from the pandemic.

Mr Gupta's pay in 2020 consisted of a cash bonus of S$3.41 million and shares worth S$4.51 million, on top of a salary base of S$1.2 million. The base salary was unchanged for the year. It also includes a non-cash component of S$62,130.

The share plan amounting to S$4.51 million excludes the estimated value of retention shares amounting to S$901,460, which serve as a retention tool and to compensate staff for the time value of deferral. It comes as at DBS, ordinary dividends on unvested shares do not accrue to employees.