Many people are all rage and upset upon learning that Mr TT Durai earns about S$600,000 a year.
I felt equally upset and told myself that luckily I didn't make much donations, just a few bucks here and there.
Then, of course, there are those that defend his pay, by saying that comparing to private companies who manages $200 million fund, Mr Durai's pay is reasonable.
Well, Mr Durai himself said that he is running NKF just like any other business. I guess he is expecting business-type pay package.
Well, I agree to a certain extent. Of course, people who work for these organizations are treating it just like any other full-time job. We can't expect them to be paid "peanuts" just because they are charitable organization.
It is then up to the staff, to donate whatever they feel like. So in terms of work, yeah, I would agree that those workers should be paid market rate. Just like the CEO.
But just like any other business, Financial statements are available for view to the owners, shareholders, investors. Just like any business that takes money from the public (aka Publicly Listed Companies) , audited statements should be made public.
In any other Private Limited companies, audited statement should also be made available to any of the shareholders.
So, NKF takes money from the public, and like any other public business, should make their Financial Statements available to the public !
Ok. Now that is set straight, let's talk about pay.
NKF yearly income is (I estimate) to be in the range of $50-80 million. How do I get that ? Based on 4 shows per year, each show get about $6-8 million, and other public fundings.
Also, based on recent newspaper report on the court case, that NKF spends $60-65 million per year, but the patients pay about $22-24 million in their co-payment scheme. NKF revenue should be $36-$43 million per year to break even.
But in 3 years, they managed to grow their reserves from $187 million to $262 million. Thus their net profit per year should be about $25 million. Add that to their $43 million revenue and you get about $68 million in gross revenue.
So my estimate should be fairly conservative. They might be getting more in terms of annual donations.
So, to put it in business format :
NKF
Revenue = S$ 70 million
Liquid Assets = S$ 262 million
Net Profit = S$ 25 million
CEO Pay = S$ 600,000
CEO Pay as % of Revenue = 0.85%
CEO Pay as % of Liquid Assets = 0.23%
CEO Pay as % of Profit = 2.4%
That doesn't look too high, does it ? Maybe it is average of businesses ? Or below average ?
Hmm....
Microsoft
Revenue = US$ 32,187 million
Liquid Assets = US$ 49,000 million
Net Profit = US$ 9,993 million
CEO Pay = US$ 542,000
CEO Pay as % of Revenue = 0.0017%
CEO Pay as % of Liquid Assets = 0.0011%
CEO Pay as % of Profit = 0.0054%
Check out Bill Gate's Pay Here
Berkshire Hathaway
Revenue = US$ 74,300 million
Liquid Assets = US$ 102,929 million
Net Profit = US$ 7,000 million
CEO Pay = US$ 100,000
CEO Pay as % of Revenue = 0.00013%
CEO Pay as % of Liquid Assets = 0.000097%
CEO Pay as % of Profit = 0.014%
Who is the CEO of Berkshire Hathaway ?
Warren Buffett
Ok.. So these people may have share-ownership in their own companies and may not take that high a pay. And they are the top 2 riches man in the world, so they don't need the money.
Something local...
DBS
Revenue = S$ 4,928 million
Total Assets = S$ 175,553 million
Net Profit = S$ 2,435 million
CEO Pay = S$ 5,249,999 (Max. Not Exact)
CEO Pay as % of Revenue = 0.11%
CEO Pay as % of Total Assets = 0.003%
CEO Pay as % of Profit = 0.2%
Check DBS out HERE
(in case scrolling up and down is hard for you to see these huuuuge figures, I will copy NKF data below)
NKF
Revenue = S$ 70 million
Liquid Assets = S$ 262 million
Net Profit = S$ 25 million
CEO Pay = S$ 600,000
CEO Pay as % of Revenue = 0.85%
CEO Pay as % of Liquid Assets = 0.23%
CEO Pay as % of Profit = 2.4%
And we all think CEO of DBS is earning big bucks ; but compare it in terms of percentages, is still way below NKF CEO's pay.
Apple to Apple comparison : CEO of DBS is managing funds that is 67,000 times more than NKF, and profits that are 9,740 times higher, but pay is only 8 or 9 times more.
DBS is also in the business of managing funds and money, and trying to make more money.
Also, if you look at our Mutual funds, management fees range from 0.5 to 1.2%. But then, that percentage is not only for the fund manager's pay but for all other expenses as well. And their target profitability performance is quite stressful.
We haven't included NKF's other expenditure and pay of the several hundreds of employees... and Directors' fees...
Hey, how about comparing it to our Prime Minister ! Since his pay is higher than that of the President of USA. Surely, if compared to our PM's pay, Mr Durai's pay should be "peanuts" , right ?
SINGAPORE INC (2004)
Revenue (Taxes Only) = S$ 26,346 million
Liquid Assets (Official National Reserves) = US$ 112,807 million = S$ 186,131 million
Net Profit (Based on Taxes Less Expenditure of S$19,936 million) = S$ 6,410 million
Current Account Balance (I don't know what that is, but I am thinking left over cash) = S$ 47,122 million
PM's Pay = S$ 3,000,000 (We all know is slightly above US$1 million. Too bad I can't find official numbers, so lets take the higher guesstimation of his pay)
PM Pay as % of Revenue = 0.011%
PM Pay as % of Liquid Assets = 0.0016%
PM Pay as % of Profit = 0.047%
PM Pay as % of Current Account Balance (whatever the hell is that) = 0.013%
So you see, even if we jack up our PM's pay, it is still much lower compared to Mr. Durai's.
And our PM's pay is already pegged to top-end Private Sectors, so as to prevent corruption, etc etc.
So people of Singapore, when our Ministers say that their pay is "peanuts", they really mean it. Our Ministers' pay ARE peanuts, compared to Mr. Durai's.
Damn, I have joined the wrong industry. Charitable Organizations earn much more compared to private and public sector !!!!
Wait.. I can see it coming. Our Ministers' pay are peanuts. We should increase their pay !
3 comments:
The patients (still don't know?) do not know that the generous public has given them 30 years of life-line for their kidney dialysis. Well, if we reduce the CEO's pay, maybe can go further just a wee bit.
Now, they do not need to speak out for the leadership of NKF... They should speak from their heart. They do not have to worry that the public will stop giving. Yeah, maybe they will stop giving to NKF for next 5 years, but then, the Board & other leadership of NKF would have changed hands, and the public would then jump back at the wagon and contribute again, now that a more sensible management team has taken over.
My firm believe is that the ends should not justify the many untruth that we hear/read in the past days.
You see, the untruth has even eaten into Mrs GCT such that she is now put into bad light for her famous "peanuts" comments. I feel sad for her husband. NKF should not have dragged her into this.
Wow. And I was really going to give him the benefit of the doubt that the salary was still within normal range compared to his peers.
Still, how accurate do you make these calculations to be? Microsoft CEO only takes home 550k a year?
Hi Tempest Blue :
Well, just do "case scenario".
Say Bill Gates takes back not only $550k, but $5.5 Million a Year. That is 10 times more.
So as percentages, just multply by 10 :
CEO Pay as % of Revenue = 0.0017% becomes 0.017%
CEO Pay as % of Liquid Assets = 0.0011% becomes 0.011%
CEO Pay as % of Profit = 0.0054% becomes 0.054%
Say Bill Gates take back US$50 Million Per Year (100 times more than stated)
CEO Pay as % of Revenue = 0.0017% becomes 0.17%
CEO Pay as % of Liquid Assets = 0.0011% becomes 0.11%
CEO Pay as % of Profit = 0.0054% becomes 0.54%
That is still 2 to 8 times lesser, in terms of percentages and ratio, compared to Mr. Durai.
Of course, I am sure some companies pay their CEO much much higher percentages than NKF. List out those companies, and see if we want our NKF to turn into those kinds of organizations.
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