SINGAPORE: Only 1 in 5 offers such equity compensation for top execs - 5 Oct 2009

Only 1 in 5 here offers such equity compensation for top execs, study finds

By Yang Huiwen

ONLY one in five big companies in Singapore offers some form of
long-term equity compensation to their top executives, a new study has
found.

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This finding has prompted concerns among remuneration experts that an
over-reliance on short-term incentives, such as bonuses, may not
motivate executives to act in the longer-term interests of the
companies and their shareholders.

The results of the study, based on a review by consultancy
Freshwater Advisers, contradicts a widely held belief that corporate
compensation policies are increasingly moving towards long-term
incentives.

'There has been a lot of talk on long-term compensation, but not
many companies are adopting it and that comes as a surprise to us,' Mr
Kwong Hui Hen, research director at Freshwater, told The Straits Times.

He said there needs to be more of a balance between short- and
long-term compensation, to make sure that an executive's remuneration
rewards long-term performance, instead of just emphasising short-term
incentives.

Short-term incentives refer to performance-related income or annual bonuses and are typically paid in cash.