This article first appeared in The Edge Malaysia Weekly on July 23, 2018 - July 29, 2018

IN this final part of our special report on CEO compensation, we compare the remuneration of the highest-paid CEOs in Malaysia with their Singapore counterparts.

Our findings,  without taking into consideration the currency exchange conversion, show that the median compensation of Malaysia’s 40 highest-paid CEOs of non-government-linked companies of RM10.4 million was higher than that of their Singapore peers, whose median remuneration was S$5.13 million.  

But which CEOs delivered more bang for the buck for their companies ?

We used our own CEO Performance Index — which is calculated by combining profit after tax and minority interests  and return on capital employed of a company and factored it against compensation — as the key performance indicator.  The higher the score, the better the CEO has performed relative to his compensation and peers.

The median index score of the Top 40 highest-paid Malaysian CEOs of non-GLCs was 1.14, which is lower than that of their Singapore counterparts, who scored 2.41.

How about government-linked companies?

The best paying GLCs in Malaysia paid their CEOs a median salary of RM1.78 million while that of CEOs of Singapore GLCs was S$5.22 million. This means Singapore GLCs pay their CEOs much better than their Malaysian counterparts.

On average, it was RM3.71 million for Malaysia and S$5.67 million in Singapore.

In terms of performance relative to compensation, CEOs of Malaysian GLCs scored lower, coming in with a median performance index score of 5.27, versus 10.78 for Singapore.

Could this be due to the fact that Malaysian GLCs have to undertake expensive social engineering programmes, compared with Singapore GLCs, which are strictly market-driven?

How do the sectors stack up against each other?

The median pay of CEOs of Malaysian banks was RM6.85 million, compared with S$5.77 million in Singapore. The Top 2 highest-paid bankers in Malaysia came from Public Bank (RM32.05 million) and Malayan Banking (RM10.11 million). Their Top 2 Singapore counterparts were DBS Bank (S$10.26 million) and Oversea-Chinese Banking Corp (S$9.69 million). DBS and Malayan Banking are GLCs.

Malaysia’s property sector paid its CEOs a median salary of RM1.45 million against S$1.0 million in Singapore.