Singapore Exchange (SGX)

[weijian]

Having higher pay after benchmarking to peers, seems to be a feature (than a bug) in the Little Red Dot.

SGX AGM is coming in 2 days time. Shareholders can rightfully ask this question but I assume that we get the usual boilerplate response.

Pay for What Performance? Remuneration of the CEO of SGX

Let’s now look at how the remuneration of the SGX CEO compares with his peers in a few other exchanges. For this purpose, I picked three other exchanges – Australian Securities Exchange (ASX), Hong Kong Exchange (HKEX) and London Stock Exchange (LSE).

Based on the latest remuneration, SGX CEO’s total remuneration is about 2.2 times that of the ASX CEO, 49% that of the HKEX CEO, and 88% that of the LSE CEO, after converting to Singapore dollars using average exchange rates. If we look at the entire period of the tenure of the SGX CEO, the SGX CEO’s average remuneration is about 1.4 times that of his counterpart at ASX, about 51% of HKEX’s and 74% of LSE’s. The new CEO of HKEX, Ms Bonnie Chan, was appointed on 1 March 2024. In her previous role as Head of Listing of HKEX, her remuneration in FY2023 was S$2.54 million.  It remains to be seen how much she will be paid in her new role as CEO.

However, ASX, HKEX and LSE are all substantially larger than SGX. In 2023, ASX had about 3.26 times the number of listings and 2.94 times the total market cap compared to SGX. For HKEX, they were 4.13 times and 6.53 times respectively, and for LSE about 3 times and 5.23 times respectively.

For ASX and LSE, the remuneration of their CEOs seemed to be more variable over the years, with significant dips for the ASX CEO in the past two years. For the LSE CEO, there was a significant increase in FY2020 followed by a significant dip in FY2022.

In contrast, the remuneration of the SGX CEO has never fallen in any year since he joined.

https://governanceforstakeholders.com/20...eo-of-sgx/

[Mushy]

Having higher pay after benchmarking to peers, seems to be a feature (than a bug) in the Little Red Dot.

SGX AGM is coming in 2 days time. Shareholders can rightfully ask this question but I assume that we get the usual boilerplate response.

FYI Weijian, no questions were asked regarding salaries this morning. I was there for both sessions.

Despite the size of the AGM, not many questions were asked and it was all over in 1.5h. Even Manu who usually can challenge the boards was quite "nice". I had seen him in so many AGMs asking good questions and making the board work hard for their fees. Maybe I usually attend small cap AGMs.

The 9am Q&A session with senior SGX mgmt team was more lively despite being a much smaller size. When asked about the dry IPO spell, Mr Loh replied there are raindrops coming. I hope he is not refering to some small ones reported coming on the catalist board like a certain ktv chain. I hope it rains soon. I say this not as shareholder of the exchange but as someone with heavy indirect interest in how well SGX equities perform.

[weijian]

Hi Mushy,

Thanks for updating us. I was around too - abeit only attended less than half of the first session (but I did catch the raindrop comment too) and then sat nearby Mano for the entire 2nd session.

With a decent TSR and a rising (sustainable) dividend in the last 2 FYs alone, not surprising that the BOD/Mgt had an easy time. So easy that I observed Mano was largely focused on his hp after he completed his customary questioning. All of us are guilty of not throwing stones when times are good.

I don't think Mano only tend to challenge BOD of smaller companies. Rather, Mano's challenges could actually be construed as a red flag indicator of companies, isn't it? So much so that when Mano's relaxed about it, what does it reflect? And on the extreme end when Mano was legally threatened, what does it reflect?

[specuvestor]

I think you guys/ VBs ask better questions than Mano just that he willing to be public about it

[Mushy]

Weijian, I think we were seated close together cos we saw the same things. Very close.

I don't mean Manu is easier on the bigger boys. Sorry for misleading comments.
I think this SGX agm is the biggest agm I had ever attended in terms of physical size.

[dreamybear]

I think VBs can take the opportunity to approach & encourage other fellow investors(during AGM mingling) to join VB to discuss stocks - make the forum more diverse/lively. 

I hope CDP can review its charges. Correct me if I am wrong - I think the reason why the traditional brokerages charge a higher commission than discount brokers is because the former need to pay CDP (around $10 each time ?) to transfer our shares to CDP whereas our shares with the latter are held in custody a/c. I thought with the current technology, it shdn't cost that much. 

I think most(or at least a substantial group) investors would prefer to keep their shares in CDP, amongst other things for more convenient admin purposes like attending AGM, corporate actions. 

Maybe cheaper fees can help in increasing liquidity ?

[ghchua]

Hi dreamybear,

But CDP don't charge you anything for holding those shares in the account after that. There is no platform fees, quarterly fees, annual fees etc. Just the upfront brokerage charge and that's it.

[dreamybear]

Hi dreamybear,

But CDP don't charge you anything for holding those shares in the account after that. There is no platform fees, quarterly fees, annual fees etc. Just the upfront brokerage charge and that's it.

Thanks for your reply.

For commission fees, my experience so far is a few dollars, or even $0.99, depending on the order size. Seems to be same amt for platform fees. 

Once in a while, they even throw in stock coupons e.g. rebate $30 cash for $300 worth of equities traded(single order) and/or free commission US/HK stocks coupons(some even no threshold requirement). Yeah, feels kinda strange to get paid to buy stocks instead of paying commission.

I think this is especially useful since there are some illiquid counters in SGX - it doesn't really make sense for an investor to pay commission say, $25 to have 100 shares filled at $0.2. *faint*

If I am not wrong, so far I think there are no quarterly/annual fees ?

For foreign stocks, I can track the FX rates real-time and exchange almost immediately whenever I find them attractive. 

So far, the pet peeve is that the P&L is mostly computed daily instead of the entry price. Think trying to induce people to trade ?

Well, I am still getting familiar with discount brokers so my experience may not be complete.

[ghchua]

Hi dreamybear,

There are traditional brokerages that offer lower than $25 commission (some even less than $10) for 100 shares transaction. Coupons? Yes, traditional brokers also offered them but not as excessive as discount brokers.

The point of having CDP settlement is having a centralized location to hold all your SGX listed equities. You can transact them at any brokers (even at discount brokers if you wish to sell) rather than being restricted to only one broker for your nominees account transactions.

And when there are AGMs, it is simple to attend. Just present yourself at the venue with your IC and you are in. No hassle at all. For corporate actions like rights and dividends, CDP also don't charge you anything for handling them.

[weijian]

Just 1 more thing to add - CDP also removes counterparty risk. Brokerages are highly leveraged entities and while regulation are strict enough to minimize insolvency risk, but they still have illiquidity risk like that of bank runs.

While one's claims are high up the list in a liquidation scenario, but it will take some time (at least 5 years) to get paid. Just google Lehman Brothers and MF Global.

During the Mgt Q&A, it was also revealed that as long as our shares are held by CDP, brokerages are unable to see our holdings and use that information to make an option market, like that of foreign exchanges. As such, the exchange generally focuses on index futures instead.

Every model has its pros and cons. Just have to choose our poison well.