Non-exec directors at medium-sized, large listed firms do better than those at small firms

SINGAPORE - Non-executive directors at medium-sized and large listed companies in Singapore notched up hefty fee increases over the past year of 16 per cent and 15 per cent respectively, on average, a new survey had found.

However, fees for non-executive directors at smaller firms grew a slower 7 per cent - close to the median, given the number of small listed companies.

Global management consultancy Hay Group said on Monday that for the 2013-2014 financial year, the median fee for non-executive directors at 229 Singapore-listed companies surveyed rose 7.1 per cent.

That took a median director's fee to $60,000 per year, up from $56,000 a year earlier.

However, the Board Remuneration and Practice in Singapore 2015 report found that there was a significant increase in median compensation for medium-sized companies, with market capitalisations between $500 million and $3 billion.

The median of their average director's fee grew 16 per cent to $75,000, compared with $65,000 a year earlier.

Large-sized companies with market capitalisation larger than $3 billion raised fees by 15 per cent, while small-sized companies - with market capitalisation below $500 million - tended to be more cautious and raised fees by only 7 per cent.

Directors in the finance sector earned a 14 per cent increase, the same as those in the transport, storage, or communications sector, and those in the properties sector got an 11 per cent increase.

Mr Kevin Goh, director of executive rewards at Hay Group in Singapore, said: "The factors leading to the overall fee increase include stringent regulatory requirements such as the revised code of corporate governance, higher prevalence of risk management committees, more frequent director meetings, and a shortage of qualified non-executive directors."

He was surprised that small-sized companies are lagging behind the market in terms of the rate of increase in director's fee.

"However, we think that this will not be sustainable given the shortage of qualified non-executive directors and expect the director's fee of small-sized companies to pick up in the next two to three years as demand for qualified non-executive directors increases," added Mr Goh.

rachaelb@sph.com.sg