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DBS CEO Piyush Gupta 2019 pay up 2% to S$12.1m

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DBS Group Holdings chief executive Piyush Gupta had his 2019 pay rise just about 2 per cent to S$12.13 million, the bank's latest annual report on Monday showed, with 2019 marking his 10th year at Singapore's largest bank.

DBS Group Holdings chief executive Piyush Gupta had his 2019 pay rise just about 2 per cent to S$12.13 million, the bank's latest annual report on Monday showed, with 2019 marking his 10th year at Singapore's largest bank.

His 2019 salary is up from S$11.9 million made due to him in 2018, reflecting an absolute difference of about S$230,000.

DBS on Monday separately said that Mr Gupta has made a personal donation of S$500,000 to the Community Chest. This was "in support of communities in Singapore especially during these challenging times", said a spokesman.

The remuneration for 2019 comprised a cash bonus of S$4.59 million, and shares worth S$6.27 million, and came on top of a base salary of S$1.2 million. The base salary was unchanged from the previous year.

The share plan amounting to S$6.27 million excludes the estimated value of retention shares worth roughly another S$1.25 million, which serve as a retention tool and are to compensate staff for the time value of deferral. This comes as at DBS, ordinary dividends on unvested shares do not accrue to employees, its annual report shows.

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In November last year, the DBS board granted a one-time special recognition award of 80,000 shares, which are subject to DBS’s usual four-year vesting period. This was to recognise Mr Gupta's "outstanding contributions" over 10 years of his leadership, DBS said. Over one decade, DBS’s total income has more than doubled, net profit has tripled, and market capitalisation has nearly doubled.

These 80,000 shares excluded a further number of retention shares amounting to 16,000. These were also in addition to the shares granted under the share plan that came up to S$6.27 million. 

In the annual report, Mr Gupta said it is likely that the new digital banking entrants in Singapore "will be free from the burden of legacy, and have access to large resources".

"They will quite possibly be able to disrupt the market in interesting ways, and are not to be underestimated. However, I do not believe that it will be easy for new entrants to be successful in the short or medium term," he said.

"With the Singapore banking market already well served by more than 200 players, the additional competition from five new digital banks is likely to be manageable."

Besides having no contest for "really no obvious" underserved segments in Singapore, the new digital players will have to meet sizeable capital requirements once they reach a certain minimum size, he said.

Meanwhile, banking incumbents have invested in their digital strengths.

"The onus for regulatory compliance will create challenges. On the back of the Uber and WeWork IPOs (initial public offerings), it is unlikely that investors will have appetite for continued unlimited cash burn without a line of sight to (operating profit) and returns," added Mr Gupta.

"While competitors are likely to drive price competition, it is a healthy sign that the regulators are unwilling to support predatory pricing. In industries like e-commerce and ride hailing, deep discounting with a 'winner take all' mentality has led to industry instability. Such instability in financial services may be unwise."

As part of board renewal, two non-executive directors will be stepping down as board members in March 2020, having been on the board for nine years or more. They are Danny Teoh, former managing partner at KPMG, and Nihal Kaviratne, who retired from Unilever Group after holding several management positions at the MNC.

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