Firms to freeze exec pay

THE pay squeeze is moving up the management ladder with many Singapore firms intending to freeze the base wages of executives.

A snap poll last December found that 44 per cent of businesses based here plan to put the brakes on executive remuneration this year.

Across Asia the number was about 35 per cent. The heightened sense of urgency here may reflect the fact that Singapore was the first country in the region to slip into recession.

But the pay freeze may not be the worst of it. Human resource consultancy Mercer, which conducted the survey, believes the numbers and the extent of the curb on salaries will only worsen.

‘While many companies in Asia have already indicated a freeze in their executive pay, we expect more organisations will follow suit once their 2009 compensation budgets are finalised,’ said Mr Wei Zheng, the leader for Mercer’s executive remuneration business in Asia.

Mercer, which surveyed 257 companies in key Asian markets like China, Hong Kong, India, Japan, Korea and Singapore, said the global economic fallout, declining stock prices and increasing public scrutiny on executive pay are forcing Asian companies to re-asses their remuneration policies.

The axe also looks set to slash short- and long-term incentive payouts.

About 40 per cent of survey respondents expect lower short-term incentive payouts in the next 12 months, while 27 per cent expect lower long-term incentive payouts.

Mercer said that approach is more pronounced among local firms than multinational companies operating in Asia.

More than 50 per cent of respondents in Singapore and Hong Kong expect to lower short-term incentive payouts over the next 12 months compared with only 25 per cent in South Korea.

via Straits Times

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