Temasick's Devious + Corrupt Pay Structure!

[makapaaa]

<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published July 9, 2010

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Bonus pool turns negative during crisis
Compensation framework tested and shown to work

By SIOW LI SEN
(SINGAPORE) Temasek's bonus pool has been wiped out due to negative performance during the financial crisis though it continues to pay market competitive salaries.

<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD></TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>And since the pool turned negative during the crisis, this has to be offset against future positive bonus units before bonus payouts are restored.

=> In other words, these CCB corrupt FAPee Sell Country Thieves can continue to draw fat salaries despite having lost hundreds of billions by 'borrowing into their future bonus' instead of taking any real pay cut!

Temasek's compensation framework was tested through the financial crisis and showed that it worked as staff shared in the pain of the downturn, said Simon Israel, its executive director.

=> What pain have they shared? During good times, they get awesome bonuses. When they lose hundreds of billions, nothing happens!

'One important aspect of our institution-building is our co-owner philosophy, where our staff share the gains and pains through the ups and downs of market cycles, alongside our shareholders and other stakeholders,' said Mr Israel.
'We certainly had a real and severe test of our compensation framework over the last three years, through the sharpest downturn since the Great Depression, but the downturn also gave us reassurance that such ownership alignment is important for a long-term investor like us.'
<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>

</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>'One important aspect of our institution building is our co-owner philosophy, where our staff share the gains and pains through the ups and downs of market cycles, alongside our shareholders and other stakeholders.'
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- Mr Israel​

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​

</TD></TR></TBODY></TABLE></TD></TR><TR><TD height=39>

</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>To a question on whether Temasek has restored wage cuts of up to 25 per cent for its senior managers implemented in January last year, he replied: 'We don't look at that on the basis of restoring wage cuts.'
At compensation reviews each year, Temasek looks at the marketplace 'but that shouldn't be read as simply restoring the compensation of the year before', he said.

=> Indeed what is there to restore when there's no real cut to begin with?

As for its bonuses, he said: 'Bonuses that people might have received for past performances have been wiped out, so there will be no bonuses paid out of the deferred bonus bank.'
A substantial part of compensation for key managers at Temasek is deferred three to five years and subject to clawbacks.
The deferred compensation goes into a Wealth Added (WA) bonus bank and each staff is allocated an account. The sharing of the WA bonus pool, positive and negative, tracks their individual performance and relative contributions to the firm.
According to the latest report, it said for the year ended March 31, 2008, it was a negative WA of $6.3 billion.

=> In other words, these useless FAT CATS have actually overdrawn $6.3B in bonuses to date! My fucking goodness!

'A year later, the negative WA of $68.1 billion for year ended March 31, 2009 led to the complete wipe-out of all existing bonus bank balances for our staff with no WA bonuses paid out for the year.
'As the bank balances were insufficient to fully set off the negative bonus allocated, the excess negative bonus allocations were aggregated at the company level and carried forward to be offset against future positive WA incentives.'

=> Why should there not be a PAY CUT then? Or even FIRING of the likes of Whore Jinx?
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[makapaaa]

Notice how Whore Jinx underperformed the MSCI Peesai and regional indices after she took over? Despite 22% expense ratio! Instead of questioning this underperformance, the 154th just boasted on the portfolio value increase, which includes fresh fund injection from Sporns' CPeeF!

 

[makapaaa]

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23-04-2010, 05:48 AM <!-- / status icon and date -->
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Temasek Holdings Financial report analysis
<HR style="BACKGROUND-COLOR: #989898; COLOR: #989898" SIZE=1><!-- / icon and title --><!-- message -->Please refer to Temasek Holdings website for the Income statement as well as Balance Sheet:

My addition to the analysis below is that there is an unusual 76% jump in "Other Operation Expenses".

The following is Written By PAPsmearer

This could be a long thread, but I want to focus on mainly just this, and not on the well documented Temasek losses, etc.

Temasek Bloated bureaucracy – What many people fail to understand is that Temasek is a fund manager incorporated as a Pte Ltd. In this sense, they are similar many other mutual fund companies around the world. They build a portfolio of companies for their investor, which in this case is MOF. And they try to earn them a return.

The overhead and fixed costs at Temasek are outrageous. In its 2009 financial statements and balance sheets, Temasek had $140.953 billion in assets (table 1). This was down from $169.844 billion in 2008. However, total expenses were $31.170 billion dollars or a whopping 22.11% of assets (percentage of assets is usually how funds are judged). Why was it only $25.7 billion in 2008, a year in which Temasek’s net profit was almost 3 times that of 2009!! So, how is it that in a year when net profit was 3 times less than in 2008, it incurred 21.28% in higher expenses!!

The expenses for 2009 (table 2) are broken down as follows:

Selling and Distribution $5.042 billion or 3.57% of assets
Administrative $8.068 billion or 5.72% of assets
Finance charges $2.727 billion or 1.93% of assets
Other operating expenses $15.333 billion or 10.88% of assets

The thing that really jumped out to me was the administrative expenses. This is expenses for salaries, rents, etc. How can a staff of only 350 incur $8 billion in administrative expenses! Do they have their own private jets, gold water faucets, etc?

Also, the selling and distribution expense is incredibly high too. In the US, mutual funds are restricted to just 0.75% for distribution fees, and most expense ratio in international funds are around 1%. Generally speaking, management fees in total can fluctuate depending on the type of fund. if a fund actively buys and sell, and we are talking hundreds, maybe thousands of stocks a year, the MER (Management expense ratio) can be high. This is not the case for Temasek. Worldwide, mutual funds are able to charge a 1% fee and this fee pays for its admin costs, salaries, etc. and still affords them a profit. In Temasek`s case, this is 22.11%. An astounding number. The taxpayer has no problem 22% of assets as an expense if Temasek management produced a say 150% increase in assets. But this is a year when Temasek lost $40 billion. It is very hard to justify.

The fact is that Temasek is out of control. There is no reign or oversight on its expenses. the truth of the matter is the PAP would have been better off parking Singapore’s money with 50 of the best fund managers in the world. Not only would they not have lost billions on Shincorp, Merrill Lynch, barclays, etc., their management expenses would have been much lower than what Temasek is charging the public. I am very interested in the salary component of Temasek`s expenses but I am sure it will not be revealed. In addition, if Singapore has its money with 50 top funds, the lowest 20% of performing fund managers can be culled every year, and replace with other fund managers. Well, when was the last time any underperforming personnel was culled at Temasek?

Its obvious that Temasek is a huge golden feeding trough for the PAP elite, a trough that the BOD is not overseeing, and may even be participating in. I am sure they make NKF look like peanuts. Temasek should be dismantled and the funds parked with the best reputable fund managers around the world. The taxpayer does not need a shiny new building, and $8 billion a year in administrative costs. Politically, the PAP should do that. Its obvious the antiquated and unprofessional way that Temasek is run reflects badly on them when such large sums of money are lost. At least if the money was with a fund manager, and he lost that much, the PAP can deflect the blame to the fund manager. But money is power, and the PAP wants to hold all the money.

Anyway, just my 2 cents on something that I don`t think the public is too aware of.
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[hochingrules]

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23-04-2010, 05:48 AM <!-- / status icon and date -->
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Temasek Holdings Financial report analysis
<HR style="BACKGROUND-COLOR: #989898; COLOR: #989898" SIZE=1><!-- / icon and title --><!-- message -->Please refer to Temasek Holdings website for the Income statement as well as Balance Sheet:

My addition to the analysis below is that there is an unusual 76% jump in "Other Operation Expenses".

The following is Written By PAPsmearer

This could be a long thread, but I want to focus on mainly just this, and not on the well documented Temasek losses, etc.

Temasek Bloated bureaucracy – What many people fail to understand is that Temasek is a fund manager incorporated as a Pte Ltd. In this sense, they are similar many other mutual fund companies around the world. They build a portfolio of companies for their investor, which in this case is MOF. And they try to earn them a return.

The overhead and fixed costs at Temasek are outrageous. In its 2009 financial statements and balance sheets, Temasek had $140.953 billion in assets (table 1). This was down from $169.844 billion in 2008. However, total expenses were $31.170 billion dollars or a whopping 22.11% of assets (percentage of assets is usually how funds are judged). Why was it only $25.7 billion in 2008, a year in which Temasek’s net profit was almost 3 times that of 2009!! So, how is it that in a year when net profit was 3 times less than in 2008, it incurred 21.28% in higher expenses!!

The expenses for 2009 (table 2) are broken down as follows:

Selling and Distribution $5.042 billion or 3.57% of assets
Administrative $8.068 billion or 5.72% of assets
Finance charges $2.727 billion or 1.93% of assets
Other operating expenses $15.333 billion or 10.88% of assets

The thing that really jumped out to me was the administrative expenses. This is expenses for salaries, rents, etc. How can a staff of only 350 incur $8 billion in administrative expenses! Do they have their own private jets, gold water faucets, etc?

Also, the selling and distribution expense is incredibly high too. In the US, mutual funds are restricted to just 0.75% for distribution fees, and most expense ratio in international funds are around 1%. Generally speaking, management fees in total can fluctuate depending on the type of fund. if a fund actively buys and sell, and we are talking hundreds, maybe thousands of stocks a year, the MER (Management expense ratio) can be high. This is not the case for Temasek. Worldwide, mutual funds are able to charge a 1% fee and this fee pays for its admin costs, salaries, etc. and still affords them a profit. In Temasek`s case, this is 22.11%. An astounding number. The taxpayer has no problem 22% of assets as an expense if Temasek management produced a say 150% increase in assets. But this is a year when Temasek lost $40 billion. It is very hard to justify.

The fact is that Temasek is out of control. There is no reign or oversight on its expenses. the truth of the matter is the PAP would have been better off parking Singapore’s money with 50 of the best fund managers in the world. Not only would they not have lost billions on Shincorp, Merrill Lynch, barclays, etc., their management expenses would have been much lower than what Temasek is charging the public. I am very interested in the salary component of Temasek`s expenses but I am sure it will not be revealed. In addition, if Singapore has its money with 50 top funds, the lowest 20% of performing fund managers can be culled every year, and replace with other fund managers. Well, when was the last time any underperforming personnel was culled at Temasek?

Its obvious that Temasek is a huge golden feeding trough for the PAP elite, a trough that the BOD is not overseeing, and may even be participating in. I am sure they make NKF look like peanuts. Temasek should be dismantled and the funds parked with the best reputable fund managers around the world. The taxpayer does not need a shiny new building, and $8 billion a year in administrative costs. Politically, the PAP should do that. Its obvious the antiquated and unprofessional way that Temasek is run reflects badly on them when such large sums of money are lost. At least if the money was with a fund manager, and he lost that much, the PAP can deflect the blame to the fund manager. But money is power, and the PAP wants to hold all the money.

Anyway, just my 2 cents on something that I don`t think the public is too aware of.
</TD></TR></TBODY></TABLE>

Hi, Tmsk has to consolidate the P/L and Balance sheet (BS) of the entities which it holds more than 50% (e.g. SIA, SMRT etc). So a good portion of the SG&A, expense etc in Tmsk's P/L and B/S, are aggregate of all these consolidation. so unless the financial statement provides more details on the breakout of these items, as to the amount that is truly accrued to tmsk as the so-called management fee, it is not correct to simply assume they have an exorbitant expense ratio.

 

[manokie]

If anyone else is inside Temasek, they will pay themselves the same salary one lah

Ask GMS see how much he will pay himself and his colleagues if he is the top guy in Temasek.

 

[tanwahtiu]

Time to , pick pack and leave. One day a dynasty has to collapse.

 

[depeche]

If anyone else is inside Temasek, they will pay themselves the same salary one lah

Ask GMS see how much he will pay himself and his colleagues if he is the top guy in Temasek.

But top salary in Temasek doesn't come with top responsiblities? How can??

 

[Papsmearer]

Hi, Tmsk has to consolidate the P/L and Balance sheet (BS) of the entities which it holds more than 50% (e.g. SIA, SMRT etc). So a good portion of the SG&A, expense etc in Tmsk's P/L and B/S, are aggregate of all these consolidation. so unless the financial statement provides more details on the breakout of these items, as to the amount that is truly accrued to tmsk as the so-called management fee, it is not correct to simply assume they have an exorbitant expense ratio.

I am the author of this article. I have to tell you that although i have taken more accounting courses than I care to recall, I am not a practicing accountant. From what I understand of Consolidated financial statements, if you add in the SG & A of the subsidiaries, you also have to add in their assets, net income, etc. For example, SIA has $13 billion in assets, is there a portion of this allocated in the Temasek statement? I don't see it, they have already report such a huge reduction in assets. Usually, if they include the subsidairies in their consolidated P & L, they should have broken them into separate entities, i.e. one entry heading for SIA, one for SMRT, etc, than a final consolidated one for the whole group.

In the end, I only have one question for you. If you think the MER is reasonable, why is it not prominently mentioned front and centre in the Temasek P & L? U know the MIW always look for opportunities to trumpet their own horns. In every other fund manager, u can very easily find their MERs. Why is it hidden all over the place in their P & L, and people like me have to go digging for it?

Finally, I bring you to the example of the Norwegian Soveriegn Wealth fund.They have a very simple philosophy. They buy shares of the world's top 5000 companies. They don't care what they do or where they are located. Temasek buy shares of maybe 50 companies, that they select using criterias that are a mystery to everyone. When one of Temasek's bets go bad, it gets hot with billions of $ in losses. If one of the Norwegian's companies go bad, that is merely one company out of 5,000. I can assure you they don't have $31 billion in expenses unlike Temasek.

 

[Orion]

I dont understand why, the expenses ratio is so high.

Give Temesek 100B, they spend 22B. Do they even earn 22B in a single year? Might as well, store the reserve since u wont lose anything by storing reserves in gold.

 

[hochingrules]

I am the author of this article. I have to tell you that although i have taken more accounting courses than I care to recall, I am not a practicing accountant. From what I understand of Consolidated financial statements, if you add in the SG & A of the subsidiaries, you also have to add in their assets, net income, etc. For example, SIA has $13 billion in assets, is there a portion of this allocated in the Temasek statement? I don't see it, they have already report such a huge reduction in assets. Usually, if they include the subsidairies in their consolidated P & L, they should have broken them into separate entities, i.e. one entry heading for SIA, one for SMRT, etc, than a final consolidated one for the whole group.

In the end, I only have one question for you. If you think the MER is reasonable, why is it not prominently mentioned front and centre in the Temasek P & L? U know the MIW always look for opportunities to trumpet their own horns. In every other fund manager, u can very easily find their MERs. Why is it hidden all over the place in their P & L, and people like me have to go digging for it?

Finally, I bring you to the example of the Norwegian Soveriegn Wealth fund.They have a very simple philosophy. They buy shares of the world's top 5000 companies. They don't care what they do or where they are located. Temasek buy shares of maybe 50 companies, that they select using criterias that are a mystery to everyone. When one of Temasek's bets go bad, it gets hot with billions of $ in losses. If one of the Norwegian's companies go bad, that is merely one company out of 5,000. I can assure you they don't have $31 billion in expenses unlike Temasek.

Hi, I am not a practicing accountant too, but I do not endorse tmsk's way of reporting their financial, which obviously attract more questions than the information it provides. My post was to merely point out that it is not correct to assume their report SG&A etc is the actual expense they incurred.

I agree with you that if they truly want to be as transparent as they claimed to be, then they should publish the actual expense ratio information and provide more breakdown of the financial statements. But alas, what can one do if they take a spin and say they are NOT a fund - meaning they don't have to report these information as would a fund have to do.

this is like the pepsi advertisement - you never win because the goal posts keep shifting! http://www.youtube.com/watch?v=AiB3683PztQ

 

[johnny333]

But top salary in Temasek doesn't come with top responsiblities? How can??

Same thing with top salaries in the PAP gov't which doesn't come with any responsibilities

 

[Papsmearer]

I dont understand why, the expenses ratio is so high.

Give Temesek 100B, they spend 22B. Do they even earn 22B in a single year? Might as well, store the reserve since u wont lose anything by storing reserves in gold.

Hahah, if they out their money into gold as you have suggested, it would be the best investment move of any fund managers. U could buy gold in the early 2000s at less than $400 a oz, now closer to $1000!!!. Chiak buay liao. Plus no need for for high management overhead and shiny new buildings.

 

[bhoven]

Hi, I am not a practicing accountant too, but I do not endorse tmsk's way of reporting their financial, which obviously attract more questions than the information it provides. My post was to merely point out that it is not correct to assume their report SG&A etc is the actual expense they incurred.

I agree with you that if they truly want to be as transparent as they claimed to be, then they should publish the actual expense ratio information and provide more breakdown of the financial statements. But alas, what can one do if they take a spin and say they are NOT a fund - meaning they don't have to report these information as would a fund have to do.

this is like the pepsi advertisement - you never win because the goal posts keep shifting! http://www.youtube.com/watch?v=AiB3683PztQ

What irks me is the practice of alluding always to the long term returns of its holdings, including state assets transferred at prices not transparent to the public. It is not difficult to report stellar returns if historical or acquisition cost is always the original book values of assets which you then mark to market umpteen years later. Then there is the reporting of quantum of total assets "managed" at end of period without complementary info showing if there were capital injections during the period. Even the reporting of P/L can be misleading if in addition to the real P/L from acquiring and selling of investment assets, it includes the aggregate P/L of companies in which it has a percentage stake requiring mandatory consolidatory accounting on a group basis. As pointed out, TH should really overhaul it current financial reporting as a conglomerate company and adopt that of a pure fund management company. Then we will not have distortion in MER, P/L, etc. Indeed if the new team in charge in more recent years want to dispel criticism that they have under or not performed , it should focus on its performance record since taking charge and market valuing ( this can be tricky for private equity such as the power stations and other infrastructure holdings ) all assets inherited at start date of its tenure . It should disclose all capital injections including those from Treasury as well as funds from bond issuance. For reporting operational and other mangement expenses it should take on board only those incurred directly at TH parent company's level. These can include cost of fund raising etc. In other words it should account to the public as a true SWF which is after all only different from another fund mangement company becuase it is owned by the state. Or is TH claiming that MOF is not a state organ?

Until it does so, it cannot shake off the perception that it is not performing satisfactorily or worse trying to claim credit which is not due to the current team and trying to red herring actual return figures on funds under its stewardship.

 

[bryanlim1972]

If anyone else is inside Temasek, they will pay themselves the same salary one lah

Ask GMS see how much he will pay himself and his colleagues if he is the top guy in Temasek.

a totally disingenuous statement. GMS has done nothing so far to show that he will mimic the behaviour of temasek.

you are attributing something to him that he did not say and attacking it to death.

:oIo::oIo::oIo::oIo::oIo::oIo::oIo::oIo::oIo::oIo::oIo::oIo::oIo: