Should top execs in firms receiving government support get a pay rise?
Profit sharing or bonus calculations based on profitability metrics need to be adjusted to apply to unusual times
Add BT as a preferred sourceCONSTRUCTION company Lian Beng Group came under the spotlight recently, after it said government Covid-19 support grants had been included in its calculations of overall profitability and, therefore, top executive remuneration. Lian Beng later explained that its executives were not benefiting directly from the grants as these had been insufficient to offset higher Covid-related costs. But the flak directed at the company is a reminder that boards and management need to be more sensitive and careful about not just how government support during the pandemic is utilised, but also in communicating this.
Paying directors more
A shareholder had asked Lian Beng why its key executives received a higher remuneration than the previous financial year, even though the company's net profit excluding government grants was lower.
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