SMRT cuts pay of chief executive

Before his pay cut, Mr Kuek's compensation was the heftiest that SMRT has paid to any of its chief executives. SMRT did not say why Mr Kuek's pay was crimped, but the previous year it defended his record remuneration.
Before his pay cut, Mr Kuek's compensation was the heftiest that SMRT has paid to any of its chief executives. SMRT did not say why Mr Kuek's pay was crimped, but the previous year it defended his record remuneration.ST PHOTO: LIM YAOHUI

Desmond Kuek got $1.87m for the last financial year, down from $2.3m the year before; number of shares unchanged

Transport operator SMRT Corp has cut the pay of its chief executive Desmond Kuek - a rare move in the corporate sector.

Mr Kuek, 53, received a total remuneration of $1.87 million for the last financial year - down from $2.31 million the year before.

The pay cut was disclosed in the firm's just-released annual report, which showed his basic salary was $830,955, and his variable performance pay $1,040,759, making for a total of $1,871,714.

It said Mr Kuek earned $2,311,023 the previous year - $793,170 in basic salary and $1,517,853 in variable pay. The number of SMRT shares awarded to him remained unchanged at 260,000.

Before this, Mr Kuek's compensation was the heftiest that SMRT had paid to any of its chief executives.

The latest package is in the ballpark of what his predecessor, Ms Saw Phaik Hwa, got before she left.

SMRT did not say why Mr Kuek's pay was crimped, but the previous year it defended his record remuneration. It said it was benchmarked against the CEOs of peer companies, and that it was competitive and at a responsible level.

The company has been struggling to renew ageing operating assets to improve service reliability and, at the same time, looking for new ways to bolster earnings eroded by higher operating expenditure.

In the 2016 financial year, SMRT posted a $109.3 million in full-year earnings - a 20.1 per cent increase from the previous year.

When he joined the transport operator in October 2012, Mr Kuek was paid $611,000 for the six months to SMRT's financial year- end in March 2013.

On an annual basis, it would have translated into an annual package of $1.22 million. For the year to March 2014, he made between $1.75 million and $2 million.

Commenting on the pay cut, human resource practitioner Alex Yew, managing partner of headhunter Team Savant, said: "Some may link it to the recent mishaps and service outages, but I think it is more in line with market sentiment and company performance.

"It is still a very decent salary."

SMRT has two other senior executives in the million-dollar club, but the company said it was not in its interest to disclose details, "given the wage discrepancies in the industry, and the competitive pressures that may result from such disclosure".

At its larger rival ComfortDelGro Corp, chief executive Kua Hong Pak's remuneration remained unchanged at between $1.75 million and $2 million.

Mr Kua had six million outstanding share options as at end-2015.

Mr Lincoln Leong, chief executive of Hong Kong's MTR Corp - also a larger company, which runs a bigger, older and more reliable rail network - earned HK$14.1 million (S$2.5 million) last year. He had just over 300,000 outstanding award shares at the end of last year.

A version of this article appeared in the print edition of The Sunday Times on June 05, 2016, with the headline 'SMRT cuts pay of chief executive'. Print Edition | Subscribe