Understanding the NUS CEO Compensation Study

The National University of Singapore (NUS) Business School's Centre for Investor Protection (CIP) recently released a comprehensive analysis titled "Paying For Value Or Just Paying More?", examining executive remuneration practices among Singapore Exchange (SGX)-listed companies. Released on March 23, 2026, this study reviews annual reports from 510 issuers for financial years ending on or after December 31, 2024. Led by experts including Professor Mak Yuen Teen, it highlights critical gaps in how companies disclose and justify executive pay, particularly bonuses. In Singapore's corporate landscape, where family-controlled businesses dominate many listings, the findings underscore the need for greater accountability to protect minority shareholders.

This research arrives at a pivotal time as Singapore strengthens its position as a global financial hub. With average chief executive officer (CEO) pay reaching S$1.24 million and executive chairperson remuneration at S$1.18 million, questions arise about whether compensation truly reflects long-term value creation or merely short-term earnings boosts. The study emphasizes that while disclosures have improved under recent SGX rules, transparency on performance metrics remains woefully inadequate.

Key Statistics on Executive Pay Levels

The study provides concrete data on remuneration trends. Across the sampled firms, total pay for top executives averaged over S$1 million annually, with CEOs slightly edging out executive chairs. This figure is derived from annual reports published between March 2025 and February 2026, capturing post-pandemic recovery and economic volatility.

These amounts, while modest compared to multimillion-dollar packages in the US, represent significant outlays for Singapore-listed entities. Notably, earnings-per-share growth strongly correlates with pay hikes, but the study questions if this linkage prioritizes sustainable performance over one-off gains.

Transparency Shortfalls in Bonus Determination

A staggering 55.7% (284 out of 510 companies) offered zero information on the performance measures used for annual bonuses. Of those disclosing, 22 relied solely on financial metrics, 146 combined financial and non-financial, and just two used only non-financial. This opacity hinders investors' ability to assess if bonuses reward genuine value creation or inflate short-term results.As detailed in the Business Times coverage, such practices contravene the spirit of SGX's 2023 disclosure mandates, which require exact pay figures for directors and CEOs but overlook related key management personnel (KMP).

Without specifics on metrics like return on equity (ROE) weightings or environmental, social, and governance (ESG) targets, shareholders cannot evaluate fairness. The study notes earnings as the dominant driver, potentially encouraging myopic decision-making.

Family Firms and Conflicts of Interest

Singapore's bourse features numerous family-run enterprises, where 70.8% of companies have at least one executive director who is a substantial shareholder or related. The study, covering 469 primary-listed firms, reveals three in four executives fall into this category, often commanding premium pay. This structure raises expropriation risks, as family influence can sway remuneration committees toward generosity.Straits Times reports highlight non-independent directors' dominance, inflating pay without robust checks.

In family contexts, remuneration for KMP tied to owners remains undisclosed, fostering suspicions of cronyism. Examples abound in sectors like property and consumer goods, where legacy control prioritizes family wealth preservation over minority interests.

Remuneration Committees Under Scrutiny

Remuneration committees (RemCos), tasked with arm's-length negotiations, often include insiders in family-heavy firms. The NUS research critiques this, advocating SGX rule amendments to restrict membership to non-executive directors only. Currently, executives' sway undermines objectivity, leading to uncompetitive or excessive awards.

Best practices from global peers like the UK and Australia emphasize independent RemCos with diverse expertise. Singapore firms lag, with weak policies failing to link pay to long-term metrics such as total shareholder return (TSR) over five years.

Photo by David Trinks on Unsplash

Linking Pay to Performance: Gaps and Evidence

While profits drive pay, the study probes deeper: do high earners deliver superior returns? Earnings correlation is strong, but lacks multi-year TSR or ESG integration. In volatile markets, one-year spikes can justify bonuses without sustained growth.

• Financial measures dominate (e.g., profit, revenue growth).
• Non-financial sparse (e.g., customer satisfaction, innovation KPIs).
• No clawback provisions for misconduct common.

Comparative analysis shows Singapore CEOs earn less than US counterparts (US averages US$15-20m), but proportionality matters. Underperformers paying top dollar erodes trust.

Singapore vs Global CEO Compensation Benchmarks

Singapore's S$1.24m CEO average pales against Hong Kong (HK$5-10m) or New York (US$20m+), per PwC and Equilar data. Yet, adjusted for firm size and GDP, ratios are comparable. Singapore's edge: lower variability, tied to conservative culture.

However, transparency trails. UK's binding shareholder votes and Australia's 'two-strikes' rules enforce accountability absent in Singapore. The NUS study positions SGX reforms as vital for attracting global capital.

Stakeholder Views and Expert Opinions

Prof Mak Yuen Teen warns of minority shareholder risks, urging proactive disclosures. Investor groups like SIAS endorse findings, calling for consultant identities. Regulators: SGX RegCo monitors but lacks enforcement teeth.

Executives counter that family expertise justifies premiums, fostering stewardship. Balanced views from NUS forums stress education for future leaders on ethical pay.

The Study's 12 Recommendations

CIP outlines actionable steps:

• Mandate performance measure disclosures with weightings.
• Restrict RemCos to non-executives.
• Reveal remuneration consultant details.
• Enhance KMP pay transparency for related parties.
• Adopt long-term incentives like restricted shares.
• Introduce clawbacks for poor performance.
• Others target ESG integration and peer benchmarking.

Implementation could elevate Singapore's governance rankings.

Implications for Investors and Shareholders

Minority investors face diluted value if pay lacks justification. Proactive scrutiny of annual reports, AGM voting, and divestment from opaque firms advised. Tools like SGX disclosures aid, but reforms needed for efficacy.

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NUS Business School's Role in Shaping Governance

As Singapore's premier business educator, NUS CIP bridges academia and practice. Studies like this inform curricula on corporate governance, preparing students for ethical leadership. Ties to /higher-ed-jobs/executive roles underscore relevance for aspiring execs.

Collaborations with regulators amplify impact, fostering a transparent ecosystem.

Future Outlook: Reforms on the Horizon?

With Budget 2026 eyeing financial resilience, SGX may adopt NUS recs. Global pressures like ESG mandates accelerate change. Enhanced transparency could curb excesses, aligning pay with prosperity. NUS research positions Singapore ahead, if acted upon.