In a written reply to Workers’ Party Non-Constituency Member of Parliament, Leon Perera, Prime Minister Lee Hsien Loong answered that the average Performance Bonus (PB), and the range of PB received by Political Office Holders of all grades in 2017, was 4.1 months.
Sharing a table that showed the range of PB over the past five years :
PM Lee wrote:
The pay components of political office holders are set out in the White Paper on “Salaries for a Capable and Committed Government” tabled in Parliament in 2012.
Apart from monthly salary, the salary components include 13th month Non-Pensionable Annual Allowance, Performance Bonus, National Bonus, and Annual Variable Component as paid to civil servants. The benchmark salaries take all these components into account.
I formed a Committee in 2017 to review whether the salary framework established in 2012 remains appropriate and valid against its intended goals, and what adjustments may be useful; and whether there is a need to adjust the salaries should there be a change in overall salary levels based on the proposed framework.
DPM Teo Chee Hean informed Parliament in March this year that the Committee had affirmed that the current salary structure for political appointment holders, including the National Bonus framework, remained sound. Therefore, we should maintain this structure. While the MR4 benchmark had increased by 9% since 2011. the Government noted that the 2017 MR4 benchmark was lower than the 2016 MR4 benchmark, and hence had decided to maintain salaries at the current level and watch salary trends further. That remains the position.
If you did not read Mr Perera’s question, you would have thought the NCMP had asked the PM about the total PB received by political office holders over the past five years.
But once you look at Mr Perera’s full question, you will realise that PM Lee had skirted around the question instead of answering the question directly.
Mr Perara had asked:
To ask the Prime Minister in each of the past five years, what has been the bonus paid to Cabinet Ministers in terms of (i) the average total number of bonus months (ii) the highest total number of bonus months paid to an individual Minister and (iii) the lowest total number of bonus months paid to an individual Minister.
And as if there was a cue to Mainstream Media, every platform zoomed into the performance bonus as their headlines instead of clarifying that the total annual bonus for the ministers is much more than just 4 months. Channel News Asia went even further by stating that the performance bonus dwindled over the years.
Political holders get at least 10 months of bonus over past 5 years
So to understand how much exactly does the political holders get for their total bonus months in a year, we refer to the salary formula that is in place since 2012, which is 13th-month bonus + Performance bonus + Annual Variable Component + National Bonus.
And based on the calculated figures according to the formula, we see that the political holders get at least 10 months of bonus on top of their annual salary. (refer to below for the calculation of national bonus)
So if the figures are correct, a minister like K Shanmugam would have received a total payout of 23.85 months in 2017.
PM Lee getting 13 months of bonus in 2017
In the case of the Prime Minister, although there is no performance bonus as per say but note that he is given a maximum of 12 months instead of 6 months of National bonus. This means he would get 13 months of bonus instead of 11.85 months like the other ministers and political appointment holders (Using the same bonus level, 6 months x 1.75). And in 2013, he would have gotten 25.75 months of annual pay which is around $2.83 million (25.75 x $110,000 monthly pay).
If PM Lee had answered Mr Perera’s questions directly, we wouldn’t have to spend an entire day trying to find the figures to the formula. Perhaps, he is just too shy to tell people directly that he is being paid the highest total number of bonus months in the cabinet.
Edit: The figure in 2013 should be based on 25.75 months and not 23.75 months
How the National Bonus is derived
How the National Bonus is derived
Bonus level = (0.25 x A)+(0.25 x B)+(0.25 x C)+(0.25 x D)
National Bonus Quantum (months) = Bonus level multiplied by 3 months (6 months for Prime Minister)