PAP must disclose how much was paid to GIC/Temasek board of directors

GIC manages about US$ 320 billion of CPF monies and our reserves. Temasek’s portfolio is currently valued at S$ 223 billion.

Although these 2 SWFs manage a total of S$623,000,000,000 of public funds, none have been accountable to the public for more than 3 decades. The government has encouraged both investment companies not to disclose the remunerations/fees of directors/external fund managers. (Ministers who are directors of GIC do not receive fees)

The government says it wants to engage citizens but in reality, it doesn’t. On 10 July, I queried the PMO on the non-disclosure of the remuneration of Temasek Holdings directors. ( “Good corporate governance at Temasek Holdings?”) It has yet to reply after almost 1 month.

In my email, I highlighted Norway’s SWF (GPFG) with about S$1.087 TRILLION managed by NBIM. Its CEO earns about $1.4 million annually and the remunerations of ALL its directors are disclosed to the public. (below)

Why does our government continue to allow GIC and Temasek to operate without any accountability to the public? What is the government trying to prevent the public from knowing bywithholding factual information?

Temasek Holdings

The directors of TH include CEO Ho Ching, wife of the prime minister, Lim Boon Heng, Bobby Chin, Teo Ming Kian and eight others. TH directors count the Chairman of NTUC, Vice Chairman of NTUC Enterprise, CEO of ComfortDelgro, Deputy Chairman of SBS Transit, Chairman of Mediacorp, etc.onits board. Are these directors, who do not have any related experience in the fund management industry, able to contribute to TH?

TH CEO’s remuneration should not be a secret

NBIM manages GPFG funds which are more than 4 times the size of TH’s. It has no issue with the disclosure of directors’ remunerations.
Even our government does not conceal the salaries of our million-dollar ministers and highest-paid civil service. All other government-linked corporations such as DBS bank, Singtel, SIA, etc alsodisclose the salaries and outsized bonuses of CEOs. There is no reason for the government not to encourage good corporate governance at TH.

I came across an interesting article on Yawning Bread which I believe is a very good estimate of the pay package of TH CEO. It was estimated that Ho Ching could be getting between $8 million and $24 million, depending on bonuses pay out. This was based on TH shortest serving CEO, Charles Goodyear’s base pay of GBP 3.7 million in his previous company BHP before joining TH. For a more detailed explanation, read Alex Au’s article on Yawning Bread.

But that was in 2010, 4 years ago, when TH was just recovering from losses after the financial crisis. TH’s portfolio was then S$186 billion. Fast forward 4 years and TH would of course justify an increase in ints CEO’s pay package due to a bigger portfolio valued at $223 billion and inflation. And not forgetting the 2 CEOs of local banks are already earning close to S$10 million. They have less responsibilities than TH CEO.

Good corporate governance demands TH discloses the remunerations of its directors to ALL Singaproeans who collectively own all TH assets. If an exact figure is not available, perhaps the pay package could be disclosed in bands, eg:

etc.

GIC

Although GIC does not compensate the PM, 2 DPMs and 2 ministers, it must disclose the pay package of all other directors eg Ang Kkong Hua, Peter Seah, Chew Choon Seng, Raymond Lim (ex minister), etc If absolute figures are not to be disclosed, it could also do so in salary bands similar to TH.

External fund managers

External fund managers also manage about 20% of GIC’s S$400 billion or S$80 billion.  A 1% management fee translates into S$800 million annually! Perhaps this may have contributed to the low returns which CPF members have been getting for 2 decades?

GIC must also disclose the fees and names of the fund managers. Eg:

On 3 Apr, The Straits Times reported that “GIC is reportedly seeding a start-up fund helmed by its former chief investment officer”. Ex-CIO Ng Kok Song had resigned from GIC after 27 years “but stayed on as an adviser as the chair of global investment”.