Impending Million-$ Pay Hike Mentioned in Foreign Press
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now the world will know how greedy the pap is!
Singapore ministers set for million-dollar pay hike
CNN International
05 Apr 07
The salary of the prime minister of Singapore is more than three times that of U.S. President George W. Bush and about four times that of Japan's Prime Minister Shinzo Abe. But that is not enough.
Singapore's Prime Minister Lee Hsien Loong may soon be getting a hefty pay rise as part of a controversial ministerial salary hike that has infuriated many Singaporeans.
Lee, who is estimated to earn about S$2 million (US$1.32 million) per year, said last month that the salaries of Singapore ministers, top public officials and judges have fallen way below benchmark private sector salaries and may need to be doubled.
"It is critical for us to keep these salaries competitive, so as to be able to bring in a continuing flow of able and successful people," Lee said in a speech in March.
Lee said that Singapore ministers, who currently earn about S$1.2 million (US$800,00) a year, should be earning S$2.2 million (US$1.45 million). Details of the new ministerial salaries will be announced in parliament on April 9.
Since 1994, the salaries of Singapore ministers have been set at two-thirds the median pay of the 48 best-paid bankers, lawyers, accountants, engineers, and executives in multi-nationals and manufacturing firms.
But the latest salary hike, which comes at a time when income disparity in Singapore is wider than ever, has sparked an outpour of unusually blunt criticism from Singaporeans.
Hundreds have signed an online petition (http://www.petitiononline.com/paypap1/petition.html) and the readers' letter columns of the state-controlled newspapers - one of the few outlets for dissenting views in the city-state - have published a series of letters protesting the planned hike.
"Government always wins"
Some Singaporeans argue that the six lucrative professions on which ministers' salaries are based do not reflect the country's economy or the government's performance.
"No matter what happens to the economy, the government always wins because it takes only the best results," Jacob Tan said in a letter to the Straits Times.
And given that a 2 percentage point rise in sales tax from July will further hit the poor, some said the government plan is tactless.
"I am rather disappointed with the government's insensitivity," reader Vanessa Teo said.
But the sharpest criticism was online. The "awesome raise on top of their already obscene pay is completely unjustifiable," read an online petition that has gathered 304 signatures.
Given the rare public outcry, analysts said the government may now hesitate to raise salaries by the full S$1 million.
"I would be surprised if they implemented the full formula that would give them over S$2 million," said Garry Rodan, director of the Asia Research Centre at Murdoch University.
The government defends the high salaries as necessary to attract the brightest people and to prevent corruption.
"If we don't do that ... corruption will set in and we will become like many other countries," Defense Minister Teo Chee Hean was quoted as saying in the Straits Times last week.
Singapore government officials' salaries are set by different wage formulas, depending on their seniority. The figures are not readily available to the public, but the prime minister earned S$1.94 million in 2000, according to the Straits Times.
Ministers' wages were last raised in 2000, but were cut in 2001 and 2003 during the economic downturn, although the cuts have since been reversed, the Public Service Division said.
"Able generals"
Some argue that Singapore ministers are not overpaid, but that ministers elsewhere are underpaid.
Singapore is an oasis of wealth, peace and law and order in a region rife with poverty, violence and corruption.
The island state is Asia's second-richest country after Japan, with a gross domestic product per capita of about $31,000.
The World Economic Forum ranks Singapore as the fifth-most competitive of 125 economies in 2006, while Transparency International said the city-state was the fifth-most corruption-free nation out of 163. Isn't that worth a price?
"According to a Chinese proverb, an able general is worth more than 10,000 foot soldiers. So too is the worth of our leaders if they have the wisdom to help us weather global competition," reader Yik Keng Yeong said.
But critics say that the prosperity and security enjoyed by Singaporeans are not that different from other Asian first-world economies such as Japan, Korea and Taiwan, where government ministers do not command such high salaries.
Finland, for instance, beat Singapore in the WEF and Transparency International polls - as second-most competitive and most corruption-free country - but its Prime Minister Matti Vanhanen earns about a sixth of Lee's estimated salary.
What irks Singapore's opposition parties is that the million-dollar salaries are only accessible to members of Lee's ruling People's Action Party. Opposition politicians have been crippled by defamation lawsuits brought by government ministers and no opposition party has ever held a ministerial post.
The opposition also argues that a million-dollar pay hike is unwarranted for leaders of a country that has no legal minimum wage and where 20 percent of the population earns an average monthly salary of S$1,500 ($991).
But Lee Kuan Yew - modern Singapore's first prime minister, who is still the leading voice in his son's cabinet - will have none of it.
"The cure to all this talk is really a good dose of incompetent government," Lee senior told the Straits Times on Thursday, adding that it is "absurd" for Singaporeans to quarrel about ministerial pay and warned that Singapore would suffer it the government could not pay competitive salaries.
"Your security will be at risk and our women will become maids in other people's countries," he said. -
Aiyaa...
They very thick skin one... they don't care what the world thinks or says about them...
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Yeah right. He says the cure is a really good dose of incompetent governance. Would he be willing to give his seat up in the first place? This is really getting from bad to disastrous. Honestly, does it take SO much money to keep the ministers loyal? If yes, then i guess they're not really morally upright eh?
This is PISSING ME OFF -
i just sign up the petition
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They should have a nation - wide poll. We pay them, we should decide.
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the arguement would always be... you voted them in, now that means you agreed to them ruling the nation for the next five years.
So remember the next time a GE comes, your decision is for 5 years. make an informed choice.
and for heavan's sake... don't just vote any opposing party... -
The poodles are voted in to serve the peasants as Servant, not as their lords.
In this case, the false dragon is just showing his true colours in getting more golden eggs.
Served by uselss lackeys that gave him the impression that the golden eggs is for his taking and the peasants will remain silent.
The `dragon` is so pathetic that he still need his daddy to hound the peasants that the misses will become graduate maid in other countries.
Why does he still need so much money since all his expenses are paid for in the 1st place ?
He need 3 breakfast, 3 lunches or 3 dinner per day ???? -
The World is looking at Singapore and laughing ??
Singapore's 'fat cat' ministers to get fatter
Asia Times
April 5, 2007
By Alex Au
PRIME Minister Lee Hsien Loong recently recommended an 83% pay increase for all his cabinet ministers, a proposal that would up their current annual pay rate of S$1.2 million (US$784,300) to S$2.2 million.
Singapore already pays its senior ministers better than any other Asian country and most Western ones. For instance, Prime Minister Lee's S$1.94 million is currently three times the US$400,000 US President George W Bush takes home in salary per year. Lee's salary is currently about 1.6 times that of his cabinet ministers.
Lee said on March 22 that ministers' current S$1.2 million salaries represented only 55% of the government's benchmark for standardized politician pay rates. Details of the new salary scales will be announced to Parliament on Monday. It is not yet known whether the government intends to adjust the pay packets to the benchmark in one leap or in a series of steps.
High pay for Singaporean government officials has historically helped curb corruption, which compared with other Asian countries ranks favorably on international graft rankings kept by such organizations as Transparency International. But many here feel that the upward adjustment, which will indirectly benefit Lee's ruling People's Action Party (PAP), which currently dominates Parliament by controlling 82 of 84 seats, is in poor taste at a time that many middle- and lower-class Singaporeans face a declining standard of living.
The benchmark Lee referred to - code name "MR4" - is a comparable measure based on private-sector compensation in six fields: law, banking, accounting, engineering, multinational companies and local manufacturing companies. Cabinet ministers' pay is equivalent to two-thirds of the midpoint between the 24th and 25th top earners in any of these fields.
"For the public service to remain an attractive employer," said Lee in his March 22 speech, "our terms must keep pace with the private sector. That is why our policy is to pay public servants competitive salaries, commensurate with private-sector earnings."
However, one would arguably be hard-pressed to find many Singaporean voters who would agree to the exponential salary increase, judging at least by the steady stream of criticism over the proposal published in Singapore's free-wheeling blogosphere.
"I think the biggest problem with the entire issue is that we have no check and balance. When ministers make the decision to increase their own pay, who approves?" asked Aaron Ng in his weblog known as Hear Ye Hear Ye.
Letters from readers published in the mainstream press have expressed more measured skepticism. "By saying that we need to pay top dollar for top talent we are saying that certain people are indispensable. This may breed complacency, " wrote Dr Anne Chong Su Yan on April 3 in the government-linked Straits Times.
Benchmark for controversy
Beginning in 1994, the benchmarking formula was established precisely to avoid such political controversy, by providing a transparent way of moving ministers and top civil servants' salaries in line with market rates. At the time, it was argued that the responsibilities of managing a small country and a civil service that employed hundreds of thousands was roughly equivalent to the responsibility of leading a large business organization.
With its super-large majority in Parliament, the PAP has had no difficulty enacting the controversial rule in the past. But with the current global debate surrounding disproportionate executive pay, paying public officials private-sector rates isn't fully accepted by the Singaporean people.
Much of the public anger stems from the fact that in absolute terms, the new proposed government salaries equivalent to more than US$1 million per year dwarf the pay of average Singaporean wage earners. This is especially true since the wage gap between upper- and middle-class earners in Singapore has widened dramatically in recent years. And PAP politicians are acutely aware of the growing disparity.
Minister of State for Trade and Industry Lee Yi Shyan (no relation to the prime minister) said in Parliament on November 8: "At the household level, between 1990 and 2005, households in the top 20% experienced the fastest per capita income growth of 6% per annum. The lowest 20% actually [saw] their household income decline between 2000 and 2005.
"We can see the effect of globalization here," he noted. "It is pulling both ends further apart. The end result? The top is soaring ahead, the bottom is falling behind and the middle is feeling the pressure."
Prime Minister Lee's proposed pay increase is clearly aimed at keeping the ruling PAP class in Singapore's upper wage-earning tier. The question is whether the move is controversial enough to create substantial political turbulence.
Three weeks before Lee spoke about the need to raise his politicians' pay by 83%, the government had defended as sufficient its recent decision to increase social welfare to the destitute by S$30 per month. Minister for Community Development, Youth and Sports Vivian Balakrishnan told Parliament during the budget debate: "An elderly recipient, living alone, currently receives about $260 [US$171] a month. We will increase that to $290 a month."
Even the ruling PAP's own backbenchers were underwhelmed by the marginal boost - cognizant, perhaps, that growing wealth disparity was a hot-button issue taken up by opposition parties during last year's general elections. Member of Parliament (MP) Lily Neo, responding to Balakrishnan, told him: "My single constituents told me that they needed to skip one meal a day to live on the $260 per month. And now, [the ministry] is going to give them $1 more a day."
Indeed, this "$30" giveaway is the source of much sarcasm in public comments about the proposed ministers' pay raise. Others think it beggars belief that Singapore's civil servants and ministers deserve to be paid multiples of what their counterparts in developed countries such as the United Kingdom and Australia earn.
(continued below: ) -
continuation:-
Suspect calculations
To some, the high figures that the benchmarking formula dispenses makes the formula itself suspect. For example, it has been pointed out by many that the top 24 or 25 earners in the six designated fields are not the same individuals from year to year. Different individuals appear within this set, as it often depends on extraordinary bonuses and stock options that individuals receive in one year, but not necessarily the next.
Ministers, on the other hand, are rarely changed through elections, so the same individuals get the high benchmarked salaries year in, year out. Some also wonder whether the formula attempts to compare apples with oranges in that the private-sector compensation used for benchmarking refers to total compensation.
However, the benchmark is believed - and official clarification is rather lacking in this regard - to be used for ministers' and top civil servants' basic salaries exclusive of their total compensation packages. That said, it should be noted that there is a one-third discount in formulating the MR4 benchmark, it being two-thirds of the 24th and 25th private-sector high-flyer.
Civil servants and ministers also get bonuses on top of their basic salaries, amounting to as much as four months' pay in years when the economy performs well. The result of all these combinations and permutations is that it is actually very hard for ordinary citizens to grasp exactly how much their political leaders pay themselves.
What they are left with is an uneasy feeling that all these statistical complications and permutations, and a perceived official reluctance to lay out the bare-bone details, could be masking even more shocking financial realities for taxpayers. Consider, for instance, pensions.
Nearly all Singaporeans save for their own retirement, while ministers get life-long pensions if they have held office for a minimum of eight years and have reached 55 years of age. Again, there's a complex formula for determining the pension amount, with a cap of "two-thirds of the highest annual salary of any office" held by the individual in question.
The shocker was momentarily revealed in June 2004 - though the mainstream media did not highlight it then nor have they since. That was when an opposition MP asked then deputy prime minister Lee Hsien Loong whether it was true that a "serving minister who turns 55 actually receive[s] both salary and pension at the same time". Lee, in answer, said yes. There are currently eight cabinet ministers aged 55 and above, including Lee himself.
Alex Au is an independent social and political commentator, freelance writer and blogger based in Singapore. He often speaks at public forums on politics, culture and gay issues.
Above article extracted from Singapore Window.Org -
Just a good dose of plain answers will do the trick
The civil service pay debate has betrayed the chasm of opinion but will the Government heed public sentiments?
Teo Hwee Nak
Commentary & Voices Editor
[email protected]
MINISTER Mentor Lee Kuan Yew never fails to rouse emotions when he speaks.
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On Wednesday, he fired off his classic sting amidst the spirited debate over the impending pay rise for ministers and top civil servants.
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Those who quarrel about $46 million — a mere 0.022 per cent of Singapore's Gross Domestic Product — don't have a sense of proportion, he said.
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And if talented Singaporeans shy away from the public sector and top leaders call it quits every five years, Singapore would suffer, and "our women will become maids in other countries".
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Not surprisingly, these words drew protestations from Singaporeans as soon as they saw them in print the next morning.
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MM Lee's words were spot on. Indeed, many of us lack that sense of proportion.
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After all, a $2.2 million annual paycheque is a mind-boggling sum to many Singaporeans, whose average four digit monthly salaries would have barely time to settle into their bank accounts before they're paid out to mortgages, loans and daily expenses.
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While the Government is concerned about losing its top brains, the average Singaporean is anxious about keeping his decent-paying job. While the Government thinks, and deals, in millions, the average Singaporean is used to only handling tens, hundreds — and rarely — thousands in his daily life.
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Therein lies the chasm between the people and Government, and nothing shows up this yawning gap as conspicuously as talk about paying our leaders more.
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Analysing the arguments, it is plain that the two groups are simply speaking in different languages.
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Today, when Defence Minister Teo Chee Hean delivers his ministerial statement on the pay increment, and the House debates, whose language should the discussion assume?
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Bear in mind that no matter how long the debate lasts, it will not make any difference because the raise will materialise anyway.
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Still — all the more because the people will have no say whatsoever in the final decision — if the debate is to be meaningful at all, it has to bridge this gulf by coming down to the level of the average Singaporean.
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Too many questions have been raised in the past few weeks. It would not only be sad, but injurious, if they go unanswered at the end of the session.
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Singaporeans will feel alienated and disengaged, something that will run counter to the Prime Minister's vision of an inclusive society.
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For while we may flash the trump card of "transparency" — that's why we have a formula, that's why we put out the numbers, that's why we're even debating it in Parliament even though there is no need to — the good intentions will all be in vain if the people's sentiments are not directly addressed.
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After all, back in 1994, after the White Paper on Competitive Salaries for Competent and Honest Government was introduced and debated, and passed with only six objections from the House, it appears the majority of the public was still unconvinced and public unhappiness unabated. The recent feedback on the resurfaced issue says it all.
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In rallying support for the White Paper in 1994, MM Lee, who was then Senior Minister, had predicted that in five to 10 years' time, the benchmark formula would have proven itself and been accepted as conventional wisdom, "just as other policies pioneered by Singapore ministers had been adopted by other countries".
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Singapore has indeed maintained its good governance, which has delivered sterling economic and social results. But the benchmark formula is nowhere near being stamped as conventional wisdom.
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Today, the debate has stagnated at the same questions raised back then, and again in 2000 when civil service pay was adjusted upwards and the formula tweaked. Why these six professions? Why top 48 earners? Why two-thirds of this median income? In fact, why have the peg at all?
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In 1994, then-Prime Minister Goh Chok Tong had admitted that there was no science behind the numbers in the formula; they were derived from his own judgement. More than a decade on, under a new Prime Minister, a new generation of talent, and a new electorate, it may be time to revisit this judgement call.
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Thirteen years on, has the talent crunch been resolved? If not, is this then a root problem that commands such urgency? Does the fact that we are revisiting the issue point to other reasons for the reluctance we see in potential politicians and mandarins, and to push factors behind the brain drain that, perhaps, the obsession with paying top dollar is masking? Has the Public Service Division conducted an in-depth study to examine what really draws and retains talent?
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In the past couple of weeks, other questions have surfaced. Why pay out pensions on top of the high salaries, when the private sector enjoys no such benefit?
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Since the salaries of ministers and senior civil servants were restructured in 2000 to build in more performance-related bonuses, what then are the key performance indicators for the ministers and the top rungs in their ministries and statutory boards, and how are they appraised? Do all ministers command that market value?
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These are all valid questions. And today's session has to address them.
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In Mr Teo's speech, we may well hear the familiar argument of the import of good governance and the gravity of the talent shortage crisis. But we also look forward to unambiguous answers to the many questions that have been broached.
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In a House dominated by one ruling party, People's Action Party MPs owe it to the electorate to step out of their party shoes and quiz the leaders on the issue with an independent mind and stand, and ensure the debate adopts the language of the man in the street, with sensitivity.
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All eyes will also be on the Opposition MPs, who were disappointingly reserved in the Budget debates. Considering ministerial pay has always been their pet topic at the hustings, Singaporeans will be waiting to see how they perform on the Parliament stage.
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MM Lee said last week that the cure for this firestorm over pay is a good dose of incompetent government.
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I'd say there's no need for excessive medication. Just a good dose of plain answers and an exhaustive down-to-earth debate might perhaps make the bitter pill easier to swallow.
The civil service pay debate has betrayed the chasm of opinion but will the Government heed public sentiments? -
Even if they "succumb" to public pressure and limit the increase in salaries this time round, they will surely make it up in other ways like through some complex variable component.
In the end, it will still be a million dollar increase in salaries for them.
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The day that LHL remains as PM is the day I will still vote for the opposition!
DOWN WITH TYRANTS AND CORRUPTED MINISTERS! -
Originally posted by Atobe:
it will come as no suprise given that "HDB is heavily subsides" formulae are applied to the method of calculations.
continuation:-
[b]Suspect calculations
To some, the high figures that the benchmarking formula dispenses makes the formula itself suspect. For example, it has been pointed out by many that the top 24 or 25 earners in the six designated fields are not the same individuals from year to year. Different individuals appear within this set, as it often depends on extraordinary bonuses and stock options that individuals receive in one year, but not necessarily the next.
[/b] -
they will probably increase the pay hike in stages lor. this year add 1 mil, next year add 2 mil and to make up for the loss of income in the 1st year, add another 3 mil in the 2.5th yearOriginally posted by charlize:Even if they "succumb" to public pressure and limit the increase in salaries this time round, they will surely make it up in other ways like through some complex variable component.
In the end, it will still be a million dollar increase in salaries for them.
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fools!
It is Lee kingdom. No one has any say. -
They could always silently increase the pension pay. Most of the public don't even know that Ministers actually get 2 money lines.
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A lot of people have already been noting the "creative accounting" done in the country.Originally posted by Fingolfin_Noldor:They could always silently increase the pension pay. Most of the public don't even know that Ministers actually get 2 money lines.
I won't be surprised that the salaries which they think they deserve will ultimately end up in their own pockets some way or another. -
We might have an Enron on our hands and we don't know anything about it.Originally posted by charlize:A lot of people have already been noting the "creative accounting" done in the country.
I won't be surprised that the salaries which they think they deserve will ultimately end up in their own pockets some way or another. -
Who would know?Originally posted by Fingolfin_Noldor:We might have an Enron on our hands and we don't know anything about it.
There is a serious problem on the absence of checks and balances. -
While this Singapore Government and the Singapore Press - which they control - continue to trumpet about the huge disparity of Ministerial and Civil Servants' wages compared to the Private Sectors, they have not been honest to also publicise the REVOLT OF THE SHAREHOLDERS.
The Revolt of the Shareholders have already started as early as 1995, when shareholders in the US became disgusted and disillushioned with the atrociously high remuneration package awarded to CEOs and the Top Management.
New age of pay topples old ideas, rewards performance
EXECUTIVE COMPENSATION REPORT CARD
EDWARD IWATA, OF THE EXAMINER STAFF Examiner researcher Kirsten Neilsen contributed to this story.
Sunday, August 27, 1995
(08-27) 04:00 PDT
SAN FRANCISCO BAY AREA --
The shareholder revolt against greedy corporate executives and bloated paychecks has struck Bay Area companies like a windstorm.
Most local corporations are seeking to motivate their top executives with long-term incentive pay and carrots in the form of stock options, according to a study of 300 Bay Area firms by the Examiner and the Compensation Design Group, a San Francisco-based consulting firm that specializes in executives' pay packages.
In the average pay package of a Bay Area executive, an impressive 62 percent of compensation came in stock-option grants. Only 38 percent of the total pay came in base salary and cash bonuses.
In the Dark Ages of corporate pay plans, before the executive pay reform movement led to new federal rules three years ago, many bosses lapped up $1 million-plus salaries, fat cash bonuses and megagrants of stock options. They enjoyed their hefty compensation even if their companies blew the bottom line or stunk up the stock market.
Not anymore. Pigging out at the corporate trough is becoming extinct - at least in public companies with alert shareholders.
More companies are adopting the national compensation trend knowns as "pay-for-performance." The new philosophy is simple: If an executive's company soars like Michael Jordan, his or her bonus and stock options take flight, too.
In the end, the thinking goes, pay for performance better serves a corporation's financial health and its stockholders, who provide equity and capital for publicly traded companies.
"Companies are moving away from fixed pay, such as salaries, and more toward risk-oriented incentive pay," said Frank Glassner, the founder and chief executive officer of Compensation Design Group. "That's a good sign."
The Examiner's study found that in San Francisco's Financial District, for instance, salaries were relatively low last year at Charles Schwab Corp., the thriving discount brokerage.
But executives enjoyed handsome yearly and long-term bonuses of $1 million to $2.5 million linked to growth in sales, profit margins and return on equity.
A short stroll away, executives at TransAmerica Corp. can bank on big stock options only if the company's stock passes a minimum threshold.
At Seagate Technology Inc., the Scotts Valley disk-drive maker, executives pocket only 60 percent of their bonuses in cash. The rest of the bonus money is deferred and must go toward stock options.
Cash-based payouts didn't exactly go south, however.
Local bosses enjoyed an average payout of $394,000 in salary, bonus, retirement contributions and restricted stock, according to the study. That's an 18 percent rise from the previous year.
The king? W.J. (Jerry) Sanders, the flamboyant chief executive at Advanced Micro Devices Inc., who scooped up $6.3 million in cash-based compensation. That's more than $17,000 a day - including weekends.
Bay Area corporate moguls also thanked the stock-market gods last year, cashing in an average of $870,000 in stock options. That's a whopping 206 percent jump from $334,000 in 1993.
The biggest beneficiary: Kenny Liu, chief executive at OPTi, a Santa Clara supplier of electronic computer components. The lucky Liu exercised stock options worth a sweet $16.4 million.
But those big payouts are exceptions to the rule. The Examiner's research clearly showed most Bay Area companies are dramatically shifting their pay practices to reflect the new era in executives' compensation.
"When it comes to compensation, corporate America is finally getting with the program," Glassner said.
"There's no place to hide anymore."
Shareholders' revolt
It wasn't always this way. In the go-go 1980s bosses carted home golden salaries and bonuses more befitting the Gilded Age than the Era of Corporate Downsizing.
Angry investors - mostly giant pension plans such as CalPERS, the California Public Employees Retirement System - waved the banner of reform and turned the public spotlight on greedy bosses.
"A lot of conscientious CEOs are great performers who aren't paid enough," said Graef cq (Bud) Crystal, a compensation expert in San Rafael.
"But a lot of piggish CEOs are driven by excessive greed, pushing for every last dollar they can get," Crystal said.
Finally, the uproar from activist investors led to strong reform two years ago.
Pressure from CalPERS and other big shareholders played a role in management and boardroom shakeouts and changes of strategy at a number of big companies.
In January 1993, CalPERS met with outside directors of 12 companies in efforts to spur performance.
Its hit list included Advanced Micro Devices, Boise Cascade, Champion International, Chrysler, IBM, MacFrugals, Pennzoil, Polaroid, Sears, Sizzler, Time Warner and Westinghouse.
In recent years, regulations have been changed to make it much easier for shareholders to keep tabs on companies.
New disclosure rules by the Securities and Exchange Commission require companies that are traded on the stock market to describe their pay philosophy, show the compensation of their top five executives and chart total shareholder return in comparison to competitors'.
On top of that, the federal government - through Internal Revenue Code 162(M) - slapped a $1 million cap on the amount companies could deduct for their executives' salaries.
The regulatory impact has been dramatic.
Thousands of corporations now eyeball their pay packages like never before. Vigilant board directors ask tougher questions of management. A small army of compensation experts design pay policies for corporate titans fearful of irate investors.
"Companies are largely complying with the spirit of the regulations," said Roger Brossy, a principal with Sibson & Co., a New York-based compensation consultancy.
The pay revolution has even touched conservative corporations in Japan. Sony Corp. recently adopted a stock-option pay plan for its 36 board directors. And consultant Glassner advises Toshiba Corp. and Dai-ichi Kangyo Bank. -
continuation:
Intel's pay philosophy was born in the mid-1980s, when the semiconductor industry was battered by Japanese players. Intel laid off scores of workers and endured pay cuts of 10 percent.
Intel devised a flexible, multilayered pay plan that rewards all employees with cash bonuses if their project, business unit and the entire company does well.
Up to 10 business and financial goals are used as carrots, from earnings per share to improved customer service.
"We'll move quickly in any direction the market takes us," Dyess said.
Future of executive pay
As corporations and investors alike grow more knowledgeable about executives' pay, what will the rest of the decade bring?
Activist investors say they will keep demanding greater accountability from executives, as part of the larger push for the corporate governance of publicly traded companies.
Pay for board directors will come under sharper scrutiny.
The granddaddy of pension funds, CalPERS, plans to pick up the pace this year. It will pressure poorly performing companies and overpaid executives and look into corporate governance issues in overseas markets, such as Japan and Europe.
Despite public outcry and regulatory reform, total compensation to executives has continued to rise.
The average salary and bonus of chief executives at 371 U.S. companies climbed 10 percent to $1.4 million, according to Standard & Poor's Compustat.
Likewise, a study by Crystal that used a different measure of compensation found that CEO pay leaped 12 percent to $3.7 million.
"The feeling here is, "We need to keep pushing on, or the corporate herd will backslide into its old habits,' " said Pat Macht, a CalPERS spokeswoman.
Activist investors are spooked by a recent SEC proposal that would move some pay disclosure data from yearly corporate proxy statements to other documents.
"It's a step backward, putting more burden on shareholders, " said Jill Lyon of Institutional Shareholder Services.
Even if the regulation passes, the revolt of the investors has changed the landscape of corporate America.
"Clearly, 1995 is the Year of the Shareholder, " Glassner said. "Compensation programs everywhere have a lot more bite now. It's truly been a revolution. " -
from a blog i read: (not word for word)
It's never about right or wrong. Say you're an engineer with a company earning $3K/mth. Boss say u get a $200 pay increment. Will you decline considering there's a kid in korea living on $1 a mth?
If you wun decline, why do you think our ministers will?
Steady man!! -
let's petition!!
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Originally posted by LinYu: