Monday, November 24, 2008

Up to 19% Pay cut?? Yeah right...

Today's headlines indicate that our government is cutting their own pay, and they are deferring from adjusting their salaries. The headline screams... Up to 19% pay cut.

For the year 2008, their bonuses will be:
  1. $100 to $300 (Paid)
  2. 0.5 months AVC (paid)
  3. 1 month AWS (13th month)
  4. 0.5 months AVC
Well, this looks reasonable, considering only the 2nd half of 2008 did the world economies start to tank. They still only have bonuses that I can only dream about.

It was the mention of the 2009 salaries that caught my eye when I was looking at it at CNA. And guess what? I've just looked at the news article again and I found that the news article have been edited! All the salary numbers for 2009 were gone.

All the numbers mentioned here are salaries for 2009 that have already been cut, and reported before it got edited!
  • President: $3.14 million
  • Prime Minister: $3.04 million
  • Ministerial Grade (MR4): $1.57 million
  • Superscale grade (SR9): $353,000
  • Members of Parliament Allowance: $190,000

What pay cut??

Even the CEO of Goldman Sachs, one of the most profitable banks in US (even now), will only earn around USD600,000 for the year 2008 because they opt to receive no cash bonuses, no stock, and no options for 2008. He earned USD68 million dollars last year. Now... USD 68 million to USD 600,000. That is a pay cut.

So $3 million is benchmarking against the private sector? Unless my eyes are mistaken, I do not see how $3 million is benchmarked against USD600,000. Note that Goldman Sachs for 9 months ending Aug has earned USD 4.4 billion dollars. They are still making profits (although much lesser than last year) in this kind of climate, and yet they opt to receive no bonuses! Singapore's economy is estimated to have negative growth next year. Negative growth and still having million dollar salaries??

So where is our government's benchmark now? Will they lower their benchmark since all the big time CEO's salaries are getting cut to their base salaries? How on earth are they benchmarking the private sector salaries? It's definitely not to their base salaries.

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