IT IS important that our stakeholders and the public have a balanced and complete view of how we remunerate our chief executive and senior management ("Singtel eyes key role in digital business"; yesterday).

We have a pay-for-performance philosophy that measures and rewards short-term, mid-term and long-term performance.

Short-term performance is measured through a balanced scorecard approach, which rates individuals against financial and non-financial key performance indicators.

Mid-term performance is rewarded by a value-sharing bonus, which is dependent on the overall economic profit of the group, that is, excess return over risk-adjusted cost of capital.

This is a true measure of value creation for our shareholders and is not linked in any way to the vagaries of the stock market.

It is important to note that this bonus can be clawed back if Singtel does not continue to deliver sustainable value.

Lastly, there is a long-term incentive scheme in the form of performance shares to reinforce the delivery of long-term growth, measured by total shareholder returns in relative and absolute terms.

Singtel's total shareholder return for this year's award was 25 per cent, compared with 11 per cent for the Straits Times Index and 12 per cent for the MSCI Asia Pacific Telco index.

Our compensation framework ensures there is an alignment between compensation and performance.

The increase in total compensation to the CEO of 11 per cent (19 per cent cash component) reflects the out performance against various plans and their targets, and not profits alone.

As a large and complex business that operates across the region, our compensation is benchmarked against comparable businesses.

Three-quarters of our earnings come from overseas, and this diversification has helped create considerable shareholder value.

Simon Israel
Chairman
Singtel