Shipping and maritime companies listed in Singapore may soon have to disclose just how much their chief executives get paid.
The move by the Singapore Exchange is said to be designed to improve corporate governance standards of companies listed in the city state.
Singapore Exchange Regulation, the bourse’s regulatory arm known as SGX RegCo, will consult the market on requiring disclosures for the remuneration of CEOs and directors, according to a statement.
It will also propose imposing a nine-year cap on the tenure of independent directors. It did not provide a timeline for either consultation.
“Board renewal and remuneration matters remain areas where improvement is needed, according to findings from an independent review of companies’ disclosures,” SGX RegCo said.
“The review also showed that remuneration disclosures remain poor,” said SGX RegCo chief executive Tan Boon Gin.
“Companies argue that for competitive reasons, remuneration details should be kept vague. But the information is important for understanding the link between business performance and financial rewards.
“SGX RegCo is of the view that remuneration details of directors and the CEOs should be transparent as they have a fiduciary duty and the question of competition is less of a concern,” he added.
Some maritime companies do disclose the exact pay of their top executives.
Keppel Corp paid CEO Loh Chin Hua SGD 6.9m ($4.9m) in the financial year ending 31 December 2021, while Yangzijiang Shipbuilding CEO Ren Letian took home just SGD 80,400.
But most companies listed in Singapore continued to report the remuneration of directors, CEOs and key management personnel in bands.
A review of disclosures by Singapore-listed companies by KMPG Singapore found only 18% of companies disclosed what they paid their CEOs, and only 35% disclosed their actual director remuneration.
Disclosures on how remuneration is calculated were mostly high level, with little transparency on how companies tie remuneration to performance and value creation, the audit and advisory company said.
Singapore’s Corporate Governance Advisory Committee (CGAC) recommended that SGX consider making such remuneration disclosures mandatory.
“The CGAC believes that currently, inadequate disclosure practices on director and CEO remuneration make it difficult for shareholders to have clear visibility on companies’ remuneration structure and practices,” it said.
The KPMG Singapore survey also found that independent directors in nearly half the companies surveyed have served beyond nine years.
There has been a global push for more transparency on executive pay, according to Bloomberg.
Last month the US Securities and Exchange Commission introduced a rule requiring disclosure of additional details such as performance incentives.
