Nov 26, 2008
Lower pay package for DBS staff
By Francis Chan
Variable bonuses - especially for its senior managers - will be lower than previous years as the global financial crisis continues to unfold. -- ST PHOTO: LIM WUI LIANG
STAFF of DBS Group will take home a lower total pay package this year, due to variable bonuses being slashed.
Yesterday, South-east Asia's largest lender told The Straits Times in an e-mail that this year, variable bonuses - especially for its senior managers - will be lower than previous years as the global financial crisis continues to unfold.
'As of now, there have been no change in monthly salaries. However, pay cuts in the form of variable bonus reductions will be more skewed to senior management,' said DBS in an e-mailed statement.
'Senior managers will get an even larger 'pay cut' as their variable bonus makes up a much larger proportion of total compensation versus junior staff,' explained a DBS spokesman.
Typically, bank employees are remunerated based on a 'total compensation' model which comprise a fixed monthly salary and a variable year-end bonus.
Given the ongoing global economic turmoil, DBS said variable bonuses in 2008 will be 'significantly lower than that paid out in previous years'.
The latest news follows layoffs of 900 employees, mainly in its Singapore and Hong Kong units, as part of a cost reduction exercise.
Although DBS did not specify the impact on each business unit or market, it said that the recent layoffs affected about 3.5 per cent of junior staff and 16 per cent of senior staff.
'After considering the number of staff affected, we felt it was crucial that the remaining 96.5 per cent of our junior staff's fixed monthly wages be kept intact,' said the DBS spokesman.
According to its annual report, DBS paid out $1.38 billion in employees' compensation in 2007, 11 per cent higher than 2006. It posted a 38 per cent drop in third-quarter profits as losses from bad debts mounted over the year.
Last week, Temasek Holdings said senior managers had volunteered to take pay cuts of between 15 and 25 per cent. The civil service has also announced wage cuts.
This is strange indeed. They should be cutting cost by reducing the pay package for their staff first before retrenching their staff. Instead, they chose to do the latter first. A knee-jerk reaction to the government's criticism towards their retrenchment ?
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