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Paying it Right


I was watching Assassination Games onDVDlast night. Jean Claude Van Damme was offered double his usual fee to assassinate someone. The fee – 1 million dollars. The amount totally did not impress me. In fact, I was thinking – so little? For so much risk? My ministers earn more in a year in a job that offered very litte risk.


In the postIraqwar years, some GLCs wanted to venture intoIraq. Opportunities were opening and they looked good. Several intrepid Singaporeans were sent by the companies to handle the preliminary work. Before long the situation deteriorated. There were so many safety concerns. One time an RPG was fired into one of the hotel rooms where these Singaporeans were staying, missing them by one or two floors. These were fairly senior staff members and given the danger, one would be forgiven to think that they were paid more than what a new MP is getting. Well, they did get some extra money for being sent to a difficult place – and they had to fight HR for a little more than that. But the same amount as a newly minted mp? Dream on. Their average salary was probably 50% of what Ms Tin is getting. To earn that amount, they put their lives in danger, and had to be separated for months from their families.  Their CEOs, of course continued to rake in the millions.


The most recent CEO in the limelight is Ms Saw ofSMRTnotoriety. Her take home wages is touted to be 1.8m. What risk does she bear, what genius does she bring to the table, what is the evidence of her blood, sweat and tears? The maximum pay of a train officer is 2.3k. Annualise this and add 3 months bonus, a train officer earns 34.5k. Is Ms Saw so wonderful that she should earn 52 times what a train officer earns? A train officer is not the lowest paid staff member. So imagine how many times more she gets compared to the cleaning lady.


There is something wrong with the way we pay people. I cannot understand why CEOs or their inner circle should be paid so many times what the lowest paid member of the company gets. Can the company make money without the effort of those who are at the bottom of the pyramid? Sure the ones at the top are, at least in theory, the visionaries, the ones with the ability to read the market, to run the show. So yes, pay them more by all means. But peg it at a reasonable percentage to those who are at the bottom. Let them feel that they too have contributed to the success of the company. Give them the dignity of having a good day’s wage for a good day’s work.


The current revision in ministerial salary has surprised me. I had expected a 20% cut so this cut is deeper. I should feel happy, but I am not. I am unhappy at the justifications and the formulation.


First of all, it is a shock to me that in a good year, a minister can get a maximum of 13.5 months worth of bonuses. In a typical year, he gets 7 months worth of bonuses. How typical is that in the life of an ordinary citizen.


Secondly, why is salary pegged at the top 1000Singaporeearners, then discounted downwards? Can I ask what the percentage of our ministers who earn this amount before they join the team is? Do we expect those who just got voted in to hit this bracket if they had remained in the secular world? Since we have many who came from the civil service or Mindef, is that the sort of pay they can expect if they had stayed? Earning potential aside, why do we always assume that the best paid are the best qualified to be politicians? Ask any statistician, and it is obvious that the top 1000 earners are outliers. Why are we paying politicians based on outliers?? And for the conspiracy theorists amongst us, how difficult will it be to manipulate the salaries of 1000 people to ensure ministerial salaries remain fat?


Thirdly, I should be happy that salaries now are affected by median salaries, unemployment rates and the earnings of the bottom 20% of the country. Each of these factors contribute 25% to their national bonus. It only affects the bonus, mind you, not the basic. Given a typical year when a minister earns 20 months worth of salary in total, with a national bonus of 3 months, each of these components contributes 3.75% of their total income. Less than the GST. And frankly, when your salary is in the region of 1 m, 3% means nothing. My beef against this scheme is now citizens cannot claim that ministers do not need to care about median salaries, unemployment rates and income growth of low income Singaporeans. Their bonuses now depend on it. Seems to me to be a little like wage –mandering.


Fourthly, it does not seem right there is no component in the formulation that takes into consideration the wages of other political leaders.


Watching CNA last night, I was amused by the concerns of attracting top talents. The reassurance that Gerard Ee offered is that while it may be more difficult, with this current package, we should still be able get good people into government. I should think so, since mps are getting 192k pa. Don’t forget the exposure that the politicians will get, and how doors will open even when they quit politics.


Mr Brown humorously wrote that Pres Nathan’s new book could possibly be, “ Heng I was there earlier”. Tony Tan said he accepted the new pay structure. Of course he would. To Pres Tan, this new pay structure gives him far more dignity. He does not need the money. A pay cut that still gives him more than a million a year, yet sounds deep – 51% cut, makes him to out to be far more noble and dignified. He certainly did not apply to be the president for the money.


Incidentally, going back to the movie I watched last night, Assassination Games, Jean Claude Van Damme offered his savings to the crook in exchange for his life. He had amassed 12 million dollars as a professional killer. Compared to our former President Nathan who is speculated to have earned between 30-40 million in his retirement years and probably saved a healthy amount, what is 12 million?


I am afraid being Singaporean has made money in the millions rather meaningless to me, even though I will never be a millionaire in my lifetime.

  1. SpeakSpokeWriteWrote
    January 5, 2012 at 5:58 am

    Forgot to add – the ministers will not have been so successful had it not been for the cooperation and the compliance of the citizens.

  1. January 5, 2012 at 2:38 pm

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