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Singapore Airlines CEO receives 88% pay rise following record profits

Singapore Airlines (SIA) posted a record annual profit for the fiscal year 2022/23, rebounding from the severe downturn induced by the COVID-19 pandemic.

According to the airline’s annual report released on Wednesday (28 Jun), SIA CEO, Mr Goh Choon Phong, saw his annual salary rise by 88% to S$6.73 million (US$4.98 million) from S$3.59 million the previous year.

The remuneration for Goh, who has been CEO since 2011, includes a base pay of S$1.14 million, bonuses of S$2.96 million, and shares and benefits amounting to S$2.63 million.

In March 2020, a period of plummeting demand for air travel, SIA secured up to S$19 billion of funding, the majority sourced from Temasek Holdings.

The state fund indicated it would underwrite the sale of shares and convertible bonds for up to S$15 billion.

This financial boost, described by Temasek International Chief Executive Dilhan Pillay Sandrasegara as a measure to ensure SIA’s growth beyond the pandemic, has arguably been instrumental in the airline’s recent success.

However, the support came at a high cost. In 2020, SIA retrenched approximately 2,400 staff worldwide, accounting for nearly 9% of its workforce. Despite the cuts, SIA currently employs around 24,000 people.

Acknowledging their employees’ commitment and sacrifices, SIA announced that eligible staff would receive an equivalent of eight months’ bonus.

Additionally, the airline will provide 0.5 months of ex-gratia bonus for each of the last three fiscal years, up to a total of 1.5 months, although senior management will not partake in this scheme.

On a brighter note, shareholders were also rewarded as SIA declared a final dividend of S$0.28 per share, coupled with an interim dividend of S$0.10 per share. The total dividend payout for the fiscal year stands at S$0.38 per share, which market analysts view as generous.

On a less celebratory note, questions persist over SIA’s fuel hedging practices, which have reportedly led to significant losses.

Shareholder Lim Seng Hoo had previously voiced his concerns regarding the airline’s fuel-hedging losses, amounting to S$3.54 billion as of June 2020, in a letter to Prime Minister Lee Hsien Loong.

Mr Lim criticized SIA’s unusually forward-thinking hedging approach, which locks in fuel costs up to five years out, significantly longer than the industry norm of one to two years.

“The high oil price stance has also influenced aggressive plane purchases, which will result in significant future losses,” Mr Lim wrote.

He urged for an independent inquiry into the issue, comparing SIA’s losses to those seen in the collapse of Barings Bank in 1995 and China Aviation Oil Corporation Limited’s jet fuel scandal in 2005.

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