Temasek Holdings Pte, Singapore’s state-owned investment firm, is implementing a company-wide wage freeze and asking senior management to take voluntary pay reductions for up to a year amid the coronavirus outbreak.
The move, which will start in April, will see Temasek halt all raises and salary increases linked to promotions. It will also introduce partial cuts to the annual bonuses of senior management, who were asked to voluntarily lower their base salaries by as much as 5%.
With the money saved, Temasek will donate to staff volunteer initiatives and support the community as needed through unspecified measures. It will also match dollar-for-dollar any voluntary base salary reductions. The compensation exercise was first reported by the Business Times (BT) and confirmed by a Temasek representative, who declined to provide further details.
It isn’t the first time Temasek, which manages S$313 billion ($224 billion), has implemented wage freezes—it took similar measures during the SARS outbreak in 2003 and during the global financial crisis in 2008, according to the BT report. Ho Ching, wife of Singapore Prime Minister Lee Hsien Loong, is chief executive of Temasek Holdings.
Temasek is heavily invested in China, with about 26% of its holdings there as of March 2019. That’s meant the Covid-19 outbreak has had a major impact on its portfolio.
The firm’s multibillion-dollar stakes in Alibaba Group Holding Ltd. and Industrial & Commercial Bank of China Ltd. have both fallen since January 1, as has the value of its interest in Singapore Airlines Ltd. The carrier also imposed a hiring freeze and is considering other measures including asking staff to take voluntary no-pay leave, according to a Straits Times report Monday, citing an internal letter from CEO Goh Choon Phong. Temasek’s investment strategy has been focused on buying into structural trends, such as changing consumption patterns.