Following a year of no salary increases, Singapore companies will be affording their senior executives a salary increase in line with cost-of-living expenses (between 3-3.75%), demonstrating an improvement in the local economic outlook.
This was revealed in Mercer’s latest Asia Executive Remuneration Snapshot Survey, released yesterday. Thirty-one Singapore companies participated in the survey.
According to Noel Teotico, senior consultant with Mercer’s Human Capital business, Singapore companies are choosing to go for a salary increase now as the economy is picking up and individuals are now becoming more open to seeking new career opportunities. These two factors have led to an increase in demand for talent leading to an increase in pressure on executive pay levels.
“In addition, companies may have made cuts to their executive salaries over the past year. Now with the economy looking up, companies are looking to have these restored,” he adds,
However, Singapore executives still lag behind their India and China counterparts when it comes to salary increases.
In India, where the highest salary increases of the year are being reported, organisation heads and his or her direct reports can expect a 10% salary increase. Second-level reports are expected to receive 12% salary increase.
While in China, direct and second-level reports can expect to receive a 5% salary increase, while organisation heads will receive only a 1.5% salary increase.
Teotico says Singapore’s lower salary increase is due to several factors. “Some Singapore companies tend to be more conservative, as our economy relies greatly on the region and beyond. India, on the other hand, has a strong domestic economy and can be more confident about resumed demand brought about by economic recovery.”
Teotico adds that the pay increases also reflect changes in cost of living, and the rate of inflation in Singapore has been lower compared to other parts of the world. “Finally, pay increases reflect talent supply and demand, and in India’s case specifically, the substantial executive pay increases could be reflective of a general talent shortage in India.”
The survey also found that 26% of Singapore companies reported no foreseeable changes in their senior executive base salaries for this year, while 19% said they were anticipating no changes in expected actual short-term incentive payments for 2010.
“Our data also suggests a shift in pay mix towards more variable pay at top levels, suggesting a greater inclination of companies to put pay-at-risk.”
Sources and references: Human Resources Online, Mercer; Topics: Salary increase
