Sembcorp Industries' CEO, senior management take voluntary 10-15% pay cut

With the cut, Sembcorp Industries' chief executive Neil McGregor took home S$1.14 million in salary and S$521,000 in bonuses for FY2017.
With the cut, Sembcorp Industries' chief executive Neil McGregor took home S$1.14 million in salary and S$521,000 in bonuses for FY2017.PHOTO: SEMBCORP INDUSTRIES

SINGAPORE - Sembcorp Industries' chief executive Neil McGregor and top executives are voluntarily taking a pay cut of 15 per cent and 10 per cent respectively, the company revealed on Thursday (March 29) in its latest annual report.

The company's non-executive directors, meanwhile, have opted to lower their fees by 15 per cent.

The reductions, which will apply to their renumeration for financial year 2017, is to "underscore their support of the company through these challenging time," said a joint statement by company chairman Ang Kong Hua and Mr McGregor, who was appointed CEO in April last year.

With the cut, Mr McGregor took home S$1.14 million in salary and S$521,000 in bonuses for FY2017. Mr Ang received S$638,000 in director's fees last year, of which S$191,000 was share-based.

In their statement in the annual report, the two said their first priority was to lift the group's performance, with disciplined capital allocation being the key.

2017 was a challenging year for Sembcorp which saw net profit for the year fall 41.6 per cent to S$230.8 million from S$394.9 million a year ago, on lower contribution from its utilities and marine businesses.

To sharpen capital allocation, Sembcorp will be looking at both the strategic allocation of resources as well as the quality of investments.

"By defining our priorities and investment criteria centrally we believe we can better diversify risk, and also capture opportunities through aligning our businesses with trends in the global marketplace," said the statement.

The company will step up capital recycling efforts, with one plan being the proposed initial public offering (IPO) of its India energy business.

"To build a platform for the business' future growth and sustainability, we initiated the process for an IPO of Sembcorp Energy India Limited on BSE Limited and the National Stock Exchange of India, with the filing of a draft red herring prospectus in February 2018," said the statement.

Sembcorp has also entered into a conditional agreement to divest its municipal water operations in South Africa.

Over the next two years, it is targeting divestments of its peripheral utilities assets to deliver estimated cash proceeds of up to S$0.5 billion. This is additional to potential proceeds from the proposed IPO of Sembcorp Energy India.

"We believe that this focus on active and systematic capital recycling will enable the group to strengthen our balance sheet and deliver sustainable growth," said the statement.