Tan Kin Lian's Blog: High earnings of new CEO

Saturday, April 10, 2010

High earnings of new CEO

Someone told me that the annual report of a listed insurance company showed that its recently recruited CEO earned $2.6 million in 2009. This remuneration was twice of the remuneration of the previous CEO who headed the company for 10 years. The insurance company had cut its policyholders' bonus two years ago due to market conditions and had still not restored the bonus cut.

He asked, "Mr. Tan, is this fair to the policyholders? Why is the company allowed to increase its management salaries by so much, while policyholders are still suffering the bonus cut?" He also pointed out that the previous CEO was a Singaporean and that the new CEO was a foreigner.

22 comments:

Anonymous said...: Cost comes from earning which will go into the life fund if NOT USED.
Whatever outflow must come somewhere and definitely not from the thin air.
You don't need rocket science brain to figure out.
Incentive trips, posh celebration, donation, advertisment etc are cost and cost has inverse relationship with bonus.; April 10, 2010 11:10 AM
Anonymous said...: Mr.Tan,
Much has been heard abt the better performance of NTUC Income.Do you have any idea that they are going to restore our bonuses this year?Wonder you will be attending this year AGM?I'm going this year because last year they made us watched the projector next door for the on-going Q & A.I noticed that they just rushed thru the AGM becos of their many supporters.

Lim A G; April 10, 2010 11:11 AM
Anonymous said...: FTs are better??; April 10, 2010 11:33 AM
Anonymous said...: which company is that..can share or give a hint? thks; April 10, 2010 11:45 AM
Anonymous said...: Anyone enlighten me which insurance company so I can avoid them in future?
Did they hire a new CEO or a robber?
I know this bank CEO who received almost $8 million last year. Did he rob his bank depositors with near zero interest rate?
I saw their spread almost 17.8%. Why the GoS did nothing?

Arm66; April 10, 2010 12:17 PM
Anonymous said...: Better in what sense? in term of revenue or profit? Revenue is easy to boost...just give more incentives and commission to the greedy agents, more advertisements , more channels and more giveaways etc.
profit is more difficult, right?
Your bonus already burned and $500K is going off to help the poor. Ok, that is laudable but who gets the credit? It should be known that it is from the life fund that the $500K comes from and the policyholders to thank for for sacrificing their bonus or lower bonus.
More importantly ask how come so many indian chiefs of GM rank with high salary. Of course to justify his own huge pay, right? Raise this at the AGM.Demand them to show the book.; April 10, 2010 12:37 PM
Anonymous said...: There is only 1 listed company in life insurance industry in Singapore. No need to ask. Think for yourself. It starts with G.; April 10, 2010 12:42 PM
Anonymous said...: For NTUC, I saw from the latest BI's that the bonus to be given is the same as last year. I.e. 0.7% for vivolife and 1.3% for revosave and other endowments.

The only extra is the anniversary bonus every 5 years, which NTUC will give out this year. Based on the restructured bonus and on 2005 (the last time when anniversary bonus was given), I think at most another 0.3%. And only if your policy inforce longer than 10 years. If shorter than 10 years, then likely your anniversary bonus will be smaller or zero.; April 10, 2010 1:00 PM
Anonymous said...: Can capital plus make money? Why sell then? You know , I know, it was to boost the market share based on weighted premium, JUST to be #1.not making money , ok lah, so long he looks good and it is sweet to beat someone and make history.Dubious or not , don't care so long can bluff the board of directors and some members of the public. You see , I am good and I have beaten someone with this strategy.... Hmmmmm, hmmmm people forgot about weigthed premium...hahhahaaha.

Sorry , people saw through , how despicable you are.; April 10, 2010 1:09 PM
Anonymous said...: Singaporean bosses will never pay a Singaporean employee higher wages than a Foreign Talent.

They are Foreign, Talented and not easy to bully.

You are Local and very easy to bully.

A Singaporean employee can always be bullied because he has;
a. expensive property and car loans to pay off
b. Private tuition costs for his children
c. Ageing parents to look after
d. No unemployment benefits
e. Maid's salary to pay to look after parents and children

A Foreign Talent is not so easy to bully because his home country will always protect him. (Let's see what happens to the Romanian diplomat.); April 10, 2010 4:46 PM
Anonymous said...: Another angle:

salaries of top CEO is fed into the salaries of ministers.

it is in the interest of the govt to have high salaried CEOs.; April 10, 2010 5:42 PM
Anonymous said...: Even our own govt also adopt this kind of dubious policy. It starts with our own elected govt so why is it surprising that the commercial world follows? One does not need to look far to see this. NTUC Income also do this, hire foreigner to become CEO, pay him more to screw us. Cut policyholders bonuses to justify his high lifestyle. Rampant advertising to make him look good. High expenditure to make him feel comfortable. In the end, policyholders suffer but many do not feel it until many years later until he is long gone. So are you going to vote for this kind of management?; April 10, 2010 5:45 PM
Anonymous said...: Great joke on surprise bonus news 2 months back... What a hell... i really thought i will get some thing better than past...

Why SG govt authorities are not able to regulate this to save hardly earned money victims who don't have any other option to continue the policy to avoid paid premiums to get back end of term...; April 10, 2010 5:54 PM
Anonymous said...: Don't be stupid buy revosave from ntuc. it is a con product only for stupid people. You are better off putting your money in fixed deposit whcih you can touch anytime without loss. If you buy revosave you will be condemmned forever until you finish the term or else you lose alot.; April 10, 2010 7:07 PM
Anonymous said...: Oh. The guy who died was also a FT. He's a Malaysian citizen (turned S'pore PR), remember? So its one FT vs another FT.; April 10, 2010 7:22 PM
Anonymous said...: Long service agents suffered by claw back commission of full refunded products. Many of them told me they have to pay back in 10 years installments, they are unable to recovered income tax and living expenses paid in the passed. By mentioned as Asia MNC, the Malaysia FT can get MNC benefit packages and it closed to 6.5m RM. He has also bought in many kampong FTs in top mgt getting MNC expats package. They can retired rich in Malaysia after 3-5 years here. The 100+ years company has lost his value after Tan Chin Tuan passed away.; April 11, 2010 7:19 AM
Anonymous said...: I'm losing faith in Singapore's banks and finance institutions.

Frankly, I trust the Malaysian banks and institutions more.

Unfortunately, many of their stable and good financial institutions are meant only for Malaysians.

No wonder many Malaysian Singapore PRs working here do not want our citizenship even offered on a silver platter.; April 11, 2010 9:32 AM
Anonymous said...: The "system" enables CEOs to be paid super salaries. Same applies to ministers.

So in order to understand and maybe solve the problem, we must analyse why the "system" can arise in the first place and why despite the indecency perceived, there is no revolt against it.; April 11, 2010 10:07 AM
Anonymous said...: Our Ministers' salaries are pegged to the top earning CEOs in Singapore. Recently the local media have been highlighting the salaries paid in 2009 to some of the CEOs in Singapore - CEO for UOB was paid over $7.0 million, CEO for Keppel was paid over $11.0 million and FT CEO for DBS was paid over $3.0 million. What do you think these news are meant for? Just wait and see what happens next.; April 11, 2010 12:06 PM
Anonymous said...: “Our Ministers' salaries are pegged to the top earning CEOs in Singapore”

This could be the reason why these top CEOs are getting sky high salaries.; April 11, 2010 2:37 PM
Anonymous said...: Give the CEO high salary so that the board of directors can have high salary or compensation too, win-win but at the expense of the policyholders. The CEO can get approval easier from the board or else confrontation which is not good for themselves. After all not their money but the shareholders' (policyholders) money.; April 11, 2010 6:06 PM
Anonymous said...: What happen next?

Answer: After election, the Govt will claim that with the winning margin, the people support Ministers' their salary increase for an excellent job turning the Sgp Economy around. It is not their fault that the the world economy had a downturn but it is their credit when Sgp economy improves. Even though the winning margin maybe lesser than the last election, it is most important to have forward looking leaders and this can only be achieve through salary matching the market i.e. high salary then unlikely to have corrupt politician.

I think we should pay our Ministers as much as they want and at the same time, both President Obama and Chinese Premier should come to learn from our Govt on compensation.

Uniquely Singapore.....

"Faster, Cheaper, Better" for heartlanders

"Slower, Fatter, Richer" for the Govt.; April 12, 2010 12:27 PM