Published November 22, 2008

Temasek plans pay cut, sees prolonged slump

Still, it also aims to expand workforce 15% in next 2 years

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(Singapore)

TEMASEK Holdings Pte Ltd, Singapore's investment company, plans to cut salaries and says a worldwide recession may extend beyond 2009. The firm, which oversees US$130 billion, said that senior management has volunteered a 15-25 per cent pay cut. The key managers will provide almost 90 per cent of the savings from the companywide cut, it said in response yesterday to a Bloomberg News query.

'As a long-term investor, we believe this current crisis will throw up tremendous opportunities,' Robert Chong, Temasek's MD of human resources, said. 'Yet, we also recognise the short-term challenges and will adjust our actions appropriately.'

Temasek, led by CEO Ho Ching, is seeking to cut costs amid a slump in financial markets that has wiped out more than US$33 trillion in global stocks this year, hurting the value of its investments. It had bought stakes in Merrill Lynch & Co and Barclays Plc after the credit crisis led to about US$966 billion of writedowns and credit losses and more than 170,000 financial job losses worldwide.

'There's still a lot of uncertainties on the outlook and, certainly, we are going to be in for a couple of lean quarters with the contraction in the US, Japan, Europe and in Singapore,' David Cohen, an economist at Action Economics in Singapore, said.



Singapore lowered its growth forecast for a fourth time this year and said yesterday that the economy may contract in 2009, prompting policymakers to implement more measures to avoid a prolonged slowdown. Temasek has a controlling stake in six of the city's 10 biggest publicly traded companies by value.

'We anticipate a global recession in 2009 and possibly beyond,' Mr Chong said.

The company also aims to expand its workforce by 15 per cent in the next two years, he added. That's part of a longer-term plan to have about 500 employees, he said.

Administrative expenses for the group, which includes Temasek's share of the companies it invests in, rose 6.4 per cent to S$8.6 billion for the year ended March, making up 10 per cent of revenue. Profit doubled for the year to S$18.2 billion as sales of energy and Chinese banking assets countered slowing returns from stockmarket investments. -- Bloomberg