ASIA PACIFIC EXECUTIVE COMPENSATION SALARY
Asia Pacific - Even though CEO salaries for Singaporean banks UOB and DBS lag behind their Australian counterparts, the executives still managed to rank as one of the ten most highly paid banking executives in the region.
A report by Asian Banker and Hay Group found that seven out of ten highly paid banking CEOs in the region for 2009 come from Australian banks, while two came from Singapore and one from Hong Kong.
ANZ managing director & CEO, Michael Smith earned the most with a salary of US$8.9 million (S$12.4m). This is followed by Commonwealth Bank of Australia and Westpac Banking's CEOs who each earned around US$6.0m (S$8.4m)
By contrast, UOB's deputy chairman and CEO Wee Ee Chong earned between US$3.8 to US$3.9m (S$5.3 - S$5.4m). The late Richard Stanley, CEO of DBS Bank would have also earned between US$3.3 to US$3.4m (S$4.6 - S$4.7m). This places the two executives in the eighth and ninth positions respectively.
OCBC's David Conner came in at 11th placing with a compensation package of US$2.6 to US$2.7m (S$3.6m - S$3.7m).
However, the report also found that the total pay for CEOs has fallen 11.3% since 2007, which it says it is understandable for bankers whose company's performance makes up for more than 75% of their total remuneration.
"In our 2009 survey, the fifty best-paid CEOs received a total of $86.25 million (S$120.7m), while two years previous they had received US$88.6 million (S$124m). The difference for the top ten bankers is even greater, however: they received a combined US$50 million (S$70m) in 2009, compared to US$54.4 million (S$76.1) in 2007, a drop of 11.3%."
However, the survey also found that performance-based remuneration becoming more important for banks. The top CEOs who had the largest percentage of performance-based remuneration were all new hires, indicating that performance is a major negotiating issue when it comes to succession.
For instance, Maybank's CEO in 2007 Amirsham Azis was given 52.1% of his pay based on performance. However, its new CEO Abdul Wahid Omar now counts on it for 80.3% of his reward, the largest jump in the listing.
According to Sylvano Damanik, head of executive reward for Hay Group in Asia, the issue of determining performance risk and factoring in time horizons will add complexity to the discussion and design of executive compensation programs for banks in Asia-Pacific.
"Going forward, 2010 will be about alignment of top remuneration with business objectives and balancing sustainable growth with short-term risk mitigation. A ‘me too’ approach to executive compensation that disregards a bank’s operating model and market segment is expensive, ineffective and puts the bank’s sustainability and increasingly, the board’s reputation at risk.”
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