The ST should be careful on how they report their facts. Lest they become even more unreliable and independent.
The title of the article states unquivocally that "No bonuses for Temasek staff". Now there is nothing unclear about "No bonuses" is there? Well when you read on you will discover that a Temasek employee's bonus is drawn from a pool that is paid out over a number of years. When the company does well, the pool gets bigger and the individual's share along with it.
Hence when Ho Ching announced "negative bonuses" it could either mean each employee will get no money from the pool, or the value of the overall pool shrinks. With the latter, negative bonuses means less bonuses and not no bonuses.
The reason why i think it is more likely to be the latter is because of Ho Chings own words: "It is a tough challenge to share negative bonuses". You can't share zero but you can share less.
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July 30, 2009
No bonuses for Temasek staff
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_410035.html
THE entire staff of Temasek Holdings are taking personal financial hits, with annual bonuses likely to be slashed in the wake of the investment firm's losses over the past year.
Part of every Temasek employee's bonus goes into a pool that is paid out over a number of years rather than at the end of each year.
When Temasek meets its internal performance benchmarks with higher-than-targeted returns, the pool of bonuses to be distributed grows and each employee gets a bigger slice.
But when it fails to do so, employees get 'negative bonuses': They get no money from the pool, or the value of the overall pool shrinks.
This compensation structure is based on a key principle of having staff 'share in the institution's performance, both for positive and negative results', said chief executive Ho Ching yesterday.
In her speech at the IPS Corporate Associates Lunch, she said: 'We share gains and pains alongside our shareholder. This is in essence having an owner's approach to our business and operations.'
Temasek came in below its targets last year as well as this year, which means staff get 'negative bonuses'.
'From CEO to office attendants, all our staff were allocated negative bonuses last year, and will be allocated more negative bonuses this year,' said Ms Ho.
If Temasek achieves above-target returns, known as Wealth Added and reported in the annual Temasek Review, it will have gains to share with its staff.
'It is a tough challenge to share negative bonuses...it is even tougher to deliver a positive Wealth Added every year,' she said.
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