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Monday, April 12, 2010

CapLand boss earns 22% less

CAPITALAND president and CEO Liew Mun Leong’s total remuneration last year was $5.8 million, down 22 per cent from $7.42 million in 2008. This was despite his bonus rising 29 per cent to $3.83 million from $2.98 million.

This bonus is largely from an economic value added (EVA) incentive plan. EVA measures the net operating profit after tax less cost of capital employed.

According to CapitaLand’s 2009 summary report, last year’s EVA bonus was higher than 2008’s due to ‘higher divestment gain’. The property giant reported divestment gains of about $1 billion for full-year 2009 – most of it from the listing of CapitaMalls Asia.

But group net profit in that year was $1.05 billion – 16 per cent lower than the $1.26 billion in 2008.

The increase in Mr Liew’s bonus last year could not offset the drop in his base pay and share award. His base salary was $1.02 million, 15 per cent less than 2008’s $1.2 million. The developer introduced pay cuts of 3-20 per cent in January last year and reversed them in November.

The 2009 summary report had a new disclosure on remuneration – the contingent award of shares under CapitaLand’s restricted stock plan and performance share plan. Mr Liew’s share award was worth $947,858 last year – 71 per cent lower than 2008’s $3.24 million.

The share award figures are based on the ‘fair value of the shares comprised in the baseline awards . . . at the time of grant’. The final number of shares released will ‘depend on the achievement of pre-determined targets’.

Mr Liew’s pay package for 2007 caught much attention because of a $20.5 million bonus – believed to be the largest awarded to the head of any company listed here. That year, CapitaLand had a record profit of $2.76 billion. Mr Liew clarified then that he might not receive all of that bonus. CapitaLand awards EVA bonuses on an accrual basis. These bonuses are credited into an account and a third of the balance is paid out each year. In a bad year, the account is subjected to clawback.

Source : Business Times – 31 Mar 2010

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