SINGAPORE, Oct 22: It pays to be a chief executive (CEO), even when your company is millions of dollars in the red, because in many cases you will still be paid handsomely.

This emerged from a look at Singapore’s top five listed companies last year in terms of net losses and the top five in terms of profits - and comparing the results with their directors’ remuneration.

And no two companies proved the above principle better than ST Assembly Test Services (Stats) and Chartered Semiconductor Manufacturing, which were both among the biggest corporate money-losers last year.

Stats’ the then-CEO Tan Bock Seng was still paid $738,000 (S$1.32 million) while Chartered’s the then-CEO, Barry Waite, was paid much more — US$4 million.

The situation was not much different in the boardrooms either. Stats and Chartered directors continued to earn fees in the face of losses, albeit lower than what they got the previous year.

But at money-losing CapitaLand and Keppel Land, directors’ remuneration actually rose as performance remained grim.

With leaders such as venture capital firm k1 Venture’s CEO, Mr Steven Green, saying that he would not draw any salary while his firm was losing money, can this be the right thing to do?

Well, the figures are all right if one follows the principle that the fixed component of pay should not change, only the variable bonus - which “should reflect how the business is doing in that year.”

That is a generally accepted practice, said Ian Speirs, director of rewards consulting at human resource consultancy Watson Wyatt.

This was the case with CapitaLand, for example. As the company narrowed its losses from $286.9 million to $275 million, CEO Liew Mun Leong’s bonus rose from $559,000 to $746,000. Turning to the profit-making companies, the correlation between profits and what the directors are paid blurs even more.

For example, Singapore Airlines, which clocked a $1.55 billion profit last year, paid its 14 directors only $2.2 million with only one director —likely to be deputy chairman and chief executive Cheong Choong Kong — paid more than $500,000.

But DBS Group Holdings, with profits just under $1 billion last year, looks to have paid its three executive directors —Jackson Tai, and former chief executives John Olds and Philippe Paillart — a whopping $16.8 million.

While its remuneration was the highest among the three local banks, it also included a special bonus to Mr Olds when he left.—The Straits Times/Asia News Network