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SINGAPORE Exchange (SGX) will pay incoming chief executive Magnus Bocker a guaranteed base salary of $750,000 a year and a minimum variable bonus of $933,000 for his first seven months.
The bourse operator announced yesterday that Mr Bocker, who is currently president of Nasdaq OMX, will also get $4.77 million over three years as compensation for loss of long-term incentives and bonuses from the job he is leaving.
Of this amount, $2.63 million will be paid when he takes up the SGX top post.
Mr Bocker, 47, is replacing Mr Hsieh Fu Hua as SGX CEO, and he will take up his new position from Dec 1 for an initial three-year term, the company announced earlier this week.
His other perks include a housing allowance of $300,000 a year for the first two years, relocation costs of $100,000, a club membership, a car and a driver.
These extra benefits are not unusual for CEOs. Apart from pay, other common perks include a car or car allowance, and country club membership - a relatively insignificant portion of the full package.
Mr Gary Lai, manager for financial services search firm Robert Walters, said that Mr Bocker's base salary of $750,000 and anticipated annual bonus of $1.6 million (pro-rated from the $933,000) is a 'fair amount' when compared with other company chiefs.
Typically, head honchos here have a basic salary of between $200,000 and just over $1 million a year, usually making up 30 per cent of their total package.
Mr Lai noted that Mr Bocker's $4.77 million compensation for loss of long-term incentives and bonuses is somewhat high.
'It's fair to compensate for his opportunity cost lost, but four plus million in today's environment is fairly steep.'
As president of Nasdaq OMX, Mr Bocker earned US$3.2 million (S$4.6 million) last year. Mr Hsieh was paid $7.18 million in the year ended June 30 last year, of which $5.3 million was bonuses.
The appointment of Mr Bocker, a Swedish national, is leading industry watchers to wonder if SGX is changing strategy at a time when it faces stiff competition from Shanghai and Hong Kong.
Mr Bocker studied business administration and finance at the University of Stockholm though he did not obtain a degree. Nevertheless, he comes with excellent credentials.
He is a dealmaker and reportedly very sharp. He played a key role in the US$3.7 billion purchase by Nasdaq of OMX in mid-2007, shortly before the financial crisis hit the world's markets.
But rival Hong Kong Stock Exchange has picked its first mainlander to be its new CEO - 48-year-old Charles Li.
Mr Li, currently chairman and CEO of JPMorgan China, last month stressed he is 'well-positioned' to tell Beijing that Hong Kong is the key to China's future.
A director at a broking house here said: 'We've had a serious blow in the IPO market, especially after the S-chips fiasco.
'One way out of this is to change strategy altogether and the appointment of Mr Bocker certainly paves the way for more non-China IPO deals, if that indeed is SGX's new strategy.'
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