Recently, DBS‘ annual report revealed that its CEO, Piyush Gupta, earned a whopping $15.4 million in 2022, a 13.2 per cent increase following the bank’s “breakout year”.
While most of us know that CEOs earn a hefty paycheck, how exactly did Piyush Gupta earn so much in just one year? And how does his pay compare to other CEOs?
Let’s break it down!
TL;DR: DBS CEO Piyush Gupta Salary Breakdown
Click to jump:
- DBS CEO Piyush Gupta Salary Breakdown
- CEO Compensation Explained
- CEO Pay Comparison
- Controversies and Afterthoughts
DBS CEO Piyush Gupta Salary Breakdown
| Salary Component | Amount |
|---|---|
| Salary Remuneration (Base Salry) | S$1,500,000 |
| Cash Bonus | S$5,765,000 |
| Deferred Remuneration* | S$1,382,030 (17.2% in cash) S$6,652,980 (82.8% in shares) Total: S$8,035,000 |
| Non cash component benefits (Club, car, driver) | S$80,529 |
| Total Salary for 2022 | S$15,380,529 |
*Does not include the estimated value of retention shares worth S$1.2 million, which is used as a retention tool and to compensate staff for the time value of deferral.
According to the 2022 annual report, Gupta’s salary saw a bump in recognition of his contributions to the bank’s stellar performance amidst a challenging year marked by “high inflation, slow growth, and bearish markets”.
This was an increase from $13.6 million in 2021, which was a 48 per cent jump from 2020 when his pay fell 24 per cent to $9.2 million during the COVID-19 pandemic. As you can already tell, a CEO’s pay is largely tied to how well the company performs.
But therein lies the question, who decides how much a CEO is paid?
CEO Compensation Explained
In modern corporations, the remuneration package of CEOs, as well as other top executives, is determined by a board of directors.
Most corporate boards have a “pay-for-performance” mantra that they use to come up with compensation packages. So, aside from a base salary, a compensation package will typically have variable components such as cash bonuses, stock options, stock ownership, and the like which will fluctuate in value based on how well the company performs.
The performance of a company can be gauged by any number of things such as profit or revenue growth, return on equity, or share price appreciation.
If you’re investing in DBS stock, you’ll also know that the company has been doing well with record profits which have driven share prices up. And since CEOs often own and receive a large number of stocks (to link executives’ financial interests with shareholders’ interests), their annual pay increases as the company thrives.
On top of that, since individuals with such talent are but a select few, these compensation packages have to be lavish enough to attract and retain top talent. This also involves benchmarking; working out how much a CEO should be paid compared to others. According to Steven Clifford, a former CEO and author of The CEO Pay Machine, the sum will often be above the 50th percentile, therefore constantly maintaining or increasing pay.
As for Piyush Gupta, he is the CEO of DBS which has received lots of international recognition with its influence being one of the biggest in the region. In Singapore, it is the largest bank by assets and 69th globally. No wonder he is being paid so much!
CEO Pay Comparison
| Rank | CEO / Key Director | Company | Total Remuneration in FY 2021 |
|---|---|---|---|
| 1 | Piyush Gupta | DBS | $13.6m |
| 2 | Kuok Khoon Hong | Wilmar Intl. | $11.6m |
| 3 | Wee Ee Cheong | UOB | $10.9m |
| 4 | Tan Yong Nang | Japfa | $10.3m |
| 5 | Chua Thian Poh | Ho Bee Land | $10m – $10.3m |
| 6 | Zhong Sheng Jian | Yanlord Land | $8.5m – $8.7m |
| 7 | Helen Wong | OCBC Bank | $7.6m |
| 8 | Wong Ngit Liong | Venture | $7.5m |
| 9 | Luong Andy | UMS | $7m – $7.5m |
| 10 | Xu Cheng Qiu | ChinaSunsine | $7.3m |
Since not all the data for Financial Year 2022 is available yet (some companies have yet to release their annual reports), here are the top-paid CEOs in SGX-listed companies. However, don’t take this at face value as not all companies disclose their CEO’s pay.
This will change in the future with a new rule that requires listed companies to disclose compensation for CEOs and individual company directors, inclusive of base salary and any bonuses or incentive pay, starting with financial years ending on or after Dec. 31, 2024.
So, we’ll get an even clearer picture of just how much the creme of the crop are paid.
Controversies and Afterthoughts
If one were to just look at the comments section of news articles talking about the pay of CEOs or even ministers, you would find many who believe that such a high pay is unjustified.
They aren’t the only ones either with many across the world questioning the widening wage gap between top-level executives and the average employee.
According to The Executive Excess 2022 from the Institute for Policy Studies (IPS), for every $1 earned by an employee, a CEO earns $670. And that figure has been rising throughout the years, a 500% increase in the last 20 years in fact.
On the other hand, there are people who believe that CEOs are the key to success as they are the single biggest impact on a company. Thus, they should be getting as much as a company is willing to pay based on the job market.
What are your thoughts on how much CEOs are paid? Comment below!
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