Why is Ho Ching's salary a "state secret"?

Temasek Holdings reported a massive plunge in one-year shareholder returns for the financial year ending March 31. The Singapore state investment firm reported a mere 1.49% shareholder return in their annual report, a major decline from the previous year’s 12%. “We remain watchful around the risks of a late cycle recession in the US. Brexit and political fragmentation continue to weigh on Europe, while China has yet to move fully to restructure its economy for longer term sustainability,” Lim Boon Heng, Temasek’s chairman, said in the annual report. “These issues have key repercussions on global sentiments and sustainable growth for the longer term,” he added. The company also reported making more divestment than investment in their last financial year, letting go of S$28 billion in assets while adding S$24 billion. However, the one thing that everyone in Singapore has been asking about all these years: Ho Ching’s salary. Nowhere in the report does the company state how much they pay their CEO.

Everyone is still wondering how much Temasek pays its CEO

PM Lee’s brother Mr Lee Hsien Yang pointed out this glaring omission on his Facebook page yesterday (10 June), saying “Temasek announced its results yesterday. No surprise that it still didn’t disclose Ho Ching’s salary. Why is it such a big secret?”
Also noting the omission is Chief of People’s Voice Party Lim Tean. Following Mr Lee’s post, he noted on his own Facebook page how “absurd” it is that Ho Ching’s salary still has not been disclosed. He asks, “where is the transparency and accountability?”
The politician also backed up Mr Lee’s query of the non-disclosure of Ho Ching’s salary as Temasek CEO, adding that this is one issue that should be debated in Parliament. Mr Lim Tean asked, “Why is the salary of the Chairman and all top executives of Temasek, the Sovereign Wealth Fund not open to scrutiny by the stakeholders i.e the citizens of Singapore?” Back in May, we noted in an article that Temasek Holdings is an exempt private company under the Singapore Companies Act, which means that the company is not required to publish its audited statutory consolidated financial statements. It’s even stated on their website. Basically, they don’t have to tell us how much Ho Ching is paid.

A calculated guess

Since Temasek has so far refused to reveal the details of the remuneration package of their CEO, blogger Phillip Ang speculated back in June 2018 that Ho Ching’s salary could be somewhere around $100 million a year. Mr Ang said that since Temasek Holdings (Private) Ltd is considered to be private sector company, it’s reasonable to assume that the CEO’s salary would be pegged to top earners in the industry without any discounts. Mr Ang based his calculations on how much other CEO’s were paid per year and how much was offered by Temasek to Charles Goodyear when they approached him to be CEO in 2009. At the time, Mr Goodyear was making a cool $54 million a year at BHP Billiton. So it would be reasonable to assume that Temasek would have offered him more. Taking $54 million as the starting point at the time when Ho Ching was appointed, that would mean she earned about $147,945 a day. That’s 25 times the Prime Minister’s salary already. Over the years, now that Temasek’s portfolio has doubled under her supervision, she must be earning more, said Mr Ang. Based on those factors, Mr Ang estimates Ho Ching’s salary to be about S$300,000 a day which comes up to about S$100 million a year.

Shouldn't sovereign wealth funds be transparent about their finances?

Now, it’s puzzling that a sovereign wealth fund like Temasek is so closely guarding the true salary figures of their top officers. After all, as Mr Lim Tean said, the stakeholders are Singaporeans and they should have the right to know how their money is being managed. This includes being transparent about how much Temasek staff are paid. When you look at Norway, for example, the management costs of their sovereign wealth fund is not a state secret. Norway’s SWF manages a portfolio of about S$1.49 trillion. Of that, about 0.05% goes to management costs which includes CEO salaries – that’s about S$750 million. We know exactly how much their CEO earns and the details of how much funds are invested in each company under their portfolio. Earlier this year, Worker’s Party MP Png Eng Huat brought up this matter in Parliament, specifically asking whether there is a remuneration cap for key management staff in GIC and Temasek and what the rage of total remuneration paid to the top three executives in GIC and Temasek, including salary and annual bonuses. In response, the Second Finance Minister Lawrence Wong who is also the National Development Minister merely evaded the question by saying that the government keeps an “arms-length relationship” with those two companies. Without revealing any salaries, Mr Wong added that the government expects the Boards to hold accountable for their respective performances and that the government leave it up to the companies to decide on management matters. He also said, “Ultimately, the Government evaluates the performance of the two entities based on their long-term returns, net of all expenses incurred.” He did, however, say that remuneration is based on performance and industry benchmarks and that the government supports a “prudent risk-taking culture”. A portion of the remuneration at both entities are also tied to long-term performance, noted the Minister. As you can see, Mr Wong did not answer the question. We still don’t know how much Ho Ching makes as the CEO of Temasek, a sovereign wealth fund. Why the secrecy?