Dear Mr Ee

Our latest survey of Human Resource professionals from 119 Singapore-based companies included questions relevant to Ministerial Pay Review. Attached is a copy of the survey form and the (yet to be released) findings.

Also, on the basis of my 30 years background as a remuneration consultant, I humbly submit my interpretation of the findings and some of my personal comments.

Open Public Hearings/Feedback Sessions

As there is some perception that many of the appointed Review Committee members are pro-establishment in their views, you should hold public hearings and feedback sessions to enhance the credibility of the Committee.

Clarification of Job Demand

Currently, most of the scepticism is concerning the benchmark for junior Ministerial pay (and not so much for the Prime Minister's pay). The public find it hard to comprehend why entry level jobs should be paid this much.

The job demand of a full Minister position especially the extent of its discretionary policy and decision making roles should be clarified so that the public can better accept the rationale of benchmarking its job size to that of private sector CEOs.

Benchmark for Full Minister's Pay

Unlike the current one for junior Ministers, the benchmark should be for the full Minister's job; the pay of junior Minister, Prime Minister, the President, other political appointment holders and Members of Parliament can then be scaled down or up based on job size relativity.

Pay not for Attracting Candidates

Attracting talent is a task best left to the political party’s leadership.

The fixed salary should be sufficient to enable suitable candidates to maintain a lifestyle appropriate to the office.

Performance Bonus not Appropriate

A Minister is not a CEO — it is not his business to achieve profit and avoid losses. Any remuneration that suggests a “performance” index is likely to fuel criticism and is unhelpful towards a smooth running of government on the basis of fairness and transparency. Only the fixed salary should be benchmarked.

Why KPIs for Ministries/Ministers are not relevant

A minister’s role is not to achieve numbers.  The job involves serving the public and the only KPIs that are relevant are election promises that the Party makes during an election campaign. These KPIs can then be the means of securing re-election.

Moreover, because improving the overall welfare of the people is a collaborative effort of the Cabinet, individual Ministries should not be incentivised to achieve their respective goals just to look good.

Peg Fixed Salary to Average CEO Salary of Large Listed Companies

Currently, the average fixed salary of CEOs of large* listed companies in Singapore is around $800,000 per annum.

If a public service discount of, say, 20% is applied, the peg would be $640,000; this would amount to 12 times the average national wage of $53,300 ($4,089 per month as @ 2010 from MOM's website).

Based on the above, the benchmark of 12 times the national average wage could be used.

* - over $1,000,000,000 (billion) in shareholders' funds

Instead of the current pension, it should be converted to a gratuity (which is quite a common practice for some private sector CEOs and senior politicians in some advanced countries) amounting to half to two-thirds of salary for 2 or 3 years after leaving office.

For multi-term appointments, the payment beyond the first 2 or 3 years could be extended but perhaps on a declining basis.

I thank you for the opportunity to express my comments and I wish the Review Commitee success in its deliberations.

Sincerely,

Peter Lee

Managing Consultant

RDS Remuneration Data Specialists Pte Ltd

www.remuneration.net