By Siow Li Sen
David Conner, OCBC Bank's outgoing chief executive, will be taking home $11.5 million, including retirement shares, when he leaves next month.
OCBC also gave a hefty pay rise of 50 per cent to its non-executive directors, raising their fees to be in line with market practices, according to the bank's latest annual report released yesterday.
Upon his retirement after 10 years with the bank, Mr Conner will remain on the board as a non-executive director.
His 2011 remuneration of $11.5 million comprises $7.1 million in salary, bonus and deferred shares and 488,029 shares on completion of his employment contract.
Based on yesterday's share price of $8.93, the retirement shares were worth about $4.4 million.
Mr Conner's 2011 $7.1 million pay is 5.3 per cent lower than the $7.5 million that he got for 2010. The salary of $1.24 million was unchanged while the bonus and the value of deferred shares were slightly lower.
OCBC chairman Cheong Choon Kong also saw an 8.6 per cent fall in his total pay to $2.95 million.
The decline was mainly due to a 22 per cent fall in the bonus to $1 million from $1.29 million.
The value of share options granted also fell almost 11 per cent to $500,000 but his salary rose 6 per cent to $1.33 million.
The lower bonuses were in line with smaller bonus payouts at OCBC for 2011. Mr Conner had at last month's results briefing said bonuses would be softer after two record years.
OCBC's 2011 net profit rose 3 per cent to $2.3 billion. The bank adjusted fees upwards for its non-executive directors for serving on the various board committees.
The annual committee chairperson fee for audit, risk management and executive committees rose to $60,000 from $40,000, and to $30,000 from $20,000 for nominating and remuneration committees.
Annual committee member fee will rise to $30,000 from $20,000 for audit, risk management and executive committees, and to $15,000 from $10,000 for nominating and remuneration committees.
The annual retainer fee of $45,000 and $3,000 attendance fee per board or board committee meeting are unchanged.
The bank also continues to pay each non-executive director 6,000 OCBC shares. OCBC's remuneration committee said it considered market practices for non-executive director compensation.
DBS last year revised upwards its non-executive directors' fees. It pays $75,000 for the annual committee chairperson fee for audit, risk management and executive committees and $35,000 for nominating and $65,000 for remuneration committees.
Annual committee member fee is $45,000 for audit, risk management and nominating committees and $20,000 for nominating and $35,000 for remuneration committees.
OCBC also said last year there were fewer executives who got guaranteed bonuses and sign-on awards. For 2011, four material risk-takers, defined as senior vice-presidents, received guaranteed bonuses, and one got a sign-on award. The total amount paid out for the five was $1.32 million.
In 2010, 88 executives received sign-on awards with one getting $600,000. There were no guaranteed bonuses paid in 2010.
In line with global developments, OCBC disclosed that senior managers have more of their compensation deferred.
'In FY2011, the remuneration committee made changes to the compensation structure resulting in an increase in the proportion of the deferred remuneration component for senior executives.'
It said 18 of its most senior managers, including Mr Conner, received 26 per cent of the remuneration in cash, with 43 per cent in variable bonus and 30 per cent in the form of deferred shares.
For the next level of management, of which there are 61 managers, the remuneration breakdown was 46 per cent in cash, 32 per cent in variable bonus and 22 per cent in deferred shares.
This article was first published in The Business Times.