7.1% hike in Singapore non-executive directors' fee in FY13/14: Hay Group

NON-EXECUTIVE directors (NEDs) at Singapore-listed companies received an increase of 7.1 per cent in the median of the average director's fee - or S$60,000 per annum - in the financial year 2013/2014, compared to S$56,000 in the previous financial year, global management consultancy Hay Group said in a report on Monday.

The report observed a "significant increase" in median compensation for medium-sized companies - those with a market capitalisation of between S$500 million and S$3 billion. The median of their average director's fee grew by 16 per cent, from S$65,000 in the previous fiscal year to S$75,000.

This was followed by large-sized companies, which raised fees by 15 per cent to an average of S$142,000. Small-sized companies raised fees by 7 per cent to S$53,000.

"The factors leading to the overall fee increase include stringent regulatory requirements such as the revised Code of Corporate Governance, higher prevalence of risk management committees, more frequent director meetings, and a shortage of qualified non-executive directors," said Kevin Goh, director of executive rewards, Hay Group, Singapore.

"We are surprised that small-sized companies are lagging behind the market in terms of the rate of increase in director's fee...we think that this will not be sustainable given the shortage of qualified NEDs and expect the director's fee of small-sized companies to pick up in the next two to three years as demand for qualified NEDs increases."

The report examined 229 companies. The analysis is based on data from the latest annual company reports collected in 2014.