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Conrad Raj
conrad@mediacorp.com.sg
C
As far as executive compensation is concerned, they do not feel the need to be fully transparent or to comply with the spirit of the Code of Corporate Governance.
While the global trend is to display greater transparency, these firms recede into their corporate shells when it comes to divulging the remuneration of their top five executives as the code would like them to do.
Their reticence or coyness in divulging key executives’ remuneration is blamed on keen competition for people in their sectors.
For instance, DBS says: “Although the Code recommends at least the top five key executives’s remuneration be disclosed within bands of $250,000, the Board believes this would be disadvantageous to the Group’s business interests, given the highly competitive conditions in the banking industry where poaching of executives is commonplace.”
The bank’s note is the typical explanation given in the annual reports of those who choose not to place their key executives’ packages under investor scrutiny.
But isn’t competition and poaching rampant throughout the corporate world?
Are the banking, medical and property sectors so unique that such concerns have to be held before the need for transparency?
It has been almost a decade since the Code (or rather, a recommendation of best practices) came into force in 2001.
Yet a study a couple of years ago by the CFA Institute Centre for Financial Market Integrity noted that the concept of individual accountability, particularly in the area of executive compensation, has a long way to go in Singapore. And little appears to have changed since then, too.
Disclosure practices here still badly need improvement. For sure, it is a far cry from the days when only total staff costs and total directors’ remuneration were provided in the annual reports.
But few companies listed on the SGX today comply fully with the spirit of the Code.
Most prefer to hide behind its “letter” and provide few details as to how the compensation, where disclosed, was arrived at.
If companies like Singapore Telecomunications, Sembcorp Industries and the Singapore Exchange can comply almost fully with the Code and disclose remuneration details — to the last dollar — of their board members and key executives, why can’t the others?
The Exchange could perhaps ask those companies, which excuse themselves from disclosing details of their executive compensation, more details on the kind of competition they face. It’s not as if the employees themselves keep their lips so tightly pursed that no one knows the compensation packages of the competition.
In fact, the code should be requiring all companies to provide full details of the board’s and key executives’ pay package, not just in bands of a quarter million dollars but down to the last cent. This would place all companies on a more level playing field.
While abuses in executive remuneration are not rampant here — nor as excessive as those in the United States where hundreds of millions of dollars are dished out to top executives, even when their decisions have had dire consequences for their companies
— transparency could ensure the possibility of abuse becomes even more remote here.
And competition for talent keeps everyone on their toes;
it should lead to improvements all round.
ompetition is healthy, it’s said, but not everyone seems to agree. Ask City Developments, Raffles Medical and the three banks here — DBS Holdings, United Overseas Bank and Oversea-Chinese Banking Corporation.The writer is
Today’s editor-at-large.pharoah88 ( Date: 15-Apr-2010 14:03) Posted:
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Garment now realease the lands to developers to build residential housing.. One day, garment have to buy back for they have to relook at the usage of lands..........
Use the lands to do farming. Perhpas, those in those road got 'kangs' (chua chu kang etc...) can aim for enbloc sales for garment to buy back to plant vegetables or pig rearing farms at psf S$ 2000.00 ...............hahaha!
Comment
&analysis today Thursday April 15, 2010 page 24Why shy away from a little competition?
Not fully disclosing top executives’ pay goes against spirit of corporate governance code
pharoah88 ( Date: 15-Apr-2010 14:01) Posted:
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If SingTel, Sembcorp and SGX can comply almost fully with the code and disclose remuneration details of board members and key executives,
why can’t the others?
Is Singapore following the fOOt Steps Of JAPAN in
Severe Acute HiGH-cOst Syndrome
(SAHS)
pharoah88 ( Date: 12-Apr-2010 17:13) Posted:
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Is RESERVE D PRICE
a "ROBBERY PREMIUM" ? ? ? ?
pharoah88 ( Date: 12-Apr-2010 17:07) Posted:
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Comment
TODAY ONLINE
Do away with reserve price Introduce windfall tax on developers’ excessive profits instead
W
Mr Cheong, a developer of high-end property, felt one of the reasons prices were high was the Government’s control of land supply, especially the placement of a reserve price on land for residential development.
“As the supply side of the development equation is managed by the public sector, market forces are often not wholly free to respond to demand,” he had argued.
“When supply overshoots real demand, prices are driven down and when it is withheld, demand overruns available supply and forces prices upwards; either situation is not healthy for inuring a stable market over the long term.”
Mr Cheong also noted: “As the state is the single largest land owner, land pricing in Singapore is largely determined by the reserve price system featured on all state land tenders.”
He cited two instances where the Government decided not to accept the submitted bids because they did not meet the reserve price, suggesting that the Government was thus driving prices up by accentuating the demand-supply mismatch.
#### they dOnt't knOw ecOnOmics ???? ####
In a strongly-worded refutation of Mr Cheong’s arguments, the MND said a reserve price “is necessary, as it is Government’s duty as the custodian of state land to ensure it obtains a fair market price for a site”.
In the case of the two instances Mr Cheong raised, it was also “arguable”, MND said, that awarding the sites at lower bid prices would “have moderated property prices or simply allowed the bidders to achieve a higher profit margin”.
But to look at it conversely: If ignoring the reserve price would not necessarily send property prices down, then why not just release land without a minimum bid price?
#### just LiKE there shOuld nOt be any Minimum Wage in a FREE Market ? ? ? ? ####
After all, the MND — whose role includes balancing the needs of house-seekers, whose interest is in affordable prices, and homeowners, who want to see their property values hold steady or rise — has awarded sales sites in the past even when the bids were below the reserve price.
#### A BiD is a BiD. bE FAIR.
DON'T PLAY DiRTY ? ? ? ? ####
It has also said the reserve price serves merely as a guide in the decision to award a site.
As for preventing developers from making excessive profits, the Government has plenty of ammunition — current or potential — to do just that.
For one, if developers really want market forces to prevail, then the Government should perhaps stop heeding their occasional calls for assistance in a downturn — like allowing them to delay completion dates of properties under development.
#### Is this a BREACH of FAIR MARKET to the CONSUMERS ? ? ? ? #### because it is time for the consumers to buy cheap in the dOwn cycle ? ? ? ?
The State could also introduce a windfall tax on profits from property sales by developers that go beyond a certain level.
It is not as if the Government is in a total loss situation when it awards land cheap.
It can recoup some of the money back through property taxes, rather than let the land lie fallow for years because the reserve price was not met.
And, because the Government staggers its release of land for sale, it is not as if all land is going to go cheap. Good luck to the guy who got a site cheap because he had better foresight than the others who did not bid.
This leads us to the “O” word.
#### Is this a DiRTY wOrd ? ####
The MND said it was not convinced the bids cited in Mr Cheong’s examples represented fair market value rather than developers being “opportunistic”.
Aren’t all land bids opportunistic to some extent?
When a developer bids for a certain piece of land, he does so betting that he is going to turn in a good profit from its development.
Otherwise why bid?
Another issue oft raised: Why is the Government’s reserve price such a closely guarded secret?
## REALLY ? ? ?
## SECRET KEEPERS MUST NOT BE ALLOWED TO OWN OR TRANSACTION IN ANY PROPERTY ##
#### EQUIVALENT TO INSIDER TRADES ####
Perhaps with the minimum price disclosed, more bidders would come into the market.
Take a parallel instance: When the Government decided to make bids for vehicle certificates of entitlement totally transparent, did it lose out in any way?
So why not give the idea a chance and do away with the reserve price system?
If things do not work out, the Government can always reinstate it. The writer is editor-at-large at T
CONRAD RAJ
CONRAD RAJ
pharoah88 ( Date: 12-Apr-2010 14:01) Posted:
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TOKYO
Public debt is expected to hit 200 per cent of GDP in the next year as the government tries to spend its way out of the economic doldrums despite plummeting tax revenues and soaring welfare costs for its ageing population.
Based on FY2010’s nominal GDP of ¥475 trillion ($7 trillion), Japan’s debt is estimated to reach ¥950 trillion — or roughly ¥7.5 million per person.
Japan “can’t finance” its record trillion-dollar budget passed in March for the coming year as it tries to stimulate its fragile economy, said Mr Hideo Kumano, chief economist at Daiichi Life Research Institute.
“Japan’s revenue is roughly ¥37 trillion and debt is ¥44 trillion in FY2010,” he said. “Its debt to budget ratio is more than 50 per cent.”
Without issuing more government bonds, Japan “would go bankrupt by 2011”, he added.
Despite crawling out of a severe year-long recession last year, Japan’s recovery remains fragile with deflation, high public debt and weak domestic demand all concerns.
Japan was stuck in a deflationary spiral for years after its asset price bubble burst in the early 1990s. Its huge public debt is a legacy of massive stimulus spending during the economic “lost decade” of the 1990s, as well as a series of pump-priming packages to tackle the recession which began in 2008.
Standard and Poor’s in January warned that it might cut its rating on Japanese government bonds, which could raise Japan’s borrowing costs amid the faltering efforts of Prime Minister Yukio Hatoyama’s government to curb debt.
The system of Japanese gove r nme n t b o n d s b e i n g bought by institutions such as the huge Japan Post Bank has been key in enabling Japan to remain buoyant since its stock market crash of 1990.
“Japan’s risk of default is low because it has a huge current account surplus, with the backing of private sector savings,” to continue purchasing bonds, said Mr Katsutoshi Inadome, bond strategist at Mitsubishi UFJ Securities.
But while Japan’s risk of a Greek-style debt crisis is seen as much less likely, the event of risk becoming reality would be devastating, say analysts who question how long the government can continue its dependence on issuing public debt.
Yet others argue that there is no precedent for the ratio of debt to GDP nearing 200 per cent being dangerous. Nomura Securities economist Takehide Kiuchi cited Britain’s government debt in the post-war period “which reached 260 per cent but (the government) didn’t face a debt crisis”.
He added: “There is no answer to the question of what the critical level of debt is for a government to go bust.”
The likes of single-currency Greece and non-eurozone countries are also different in that the latter group have flexible currency exchange rates which are more closely calibrated to their fiscal conditions, he said.
Instead, the most realistic hazard brought by huge Japanese debt is prolonged deflation under a shrinking economy, said analysts. “Regaining fiscal health needs fiscal austerity, which could weigh on economic growth,” said Mr Kiuchi. AFP
— Greece’s debt problems may currently be in the spotlight but Japan is walking its own financial tightrope, analysts said, with a public debt mountain bigger than that of any other industrialised nation.pharoah88 ( Date: 12-Apr-2010 14:01) Posted:
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HiGH FAiLURE in cOuntries with
Severe Acute HiGH-cOst SyndrOme [SAHS]
HiGH LiViNG cOsts / HiGH hOusing PRiCES / HiGH transpOrt cOst
TODAY ONLINE Monday: 12 APRIL 2010
Is Japan going broke?
Public debt to hit 200% of GDP , putting Japan at risk of bankruptcy: Analyst
Its debt to budget ratio [DBR] is more than 50 per cent. Dai-chi Life Research Institute economist Hideo Kumano