Singapore Top Executive Pay Beats Hong Kong as Living Costs Jump

Singapore’s top executives are

making more money than those in Hong Kong, with the gap expected

to widen as living costs in the island republic rise, according

to human resources consultant Towers Watson Co. (TW)

Senior executives in Singapore earned 19 percent more than

their Hong Kong counterparts in 2013, a gap that has widened to

the most in at least three years, according to Sambhav Rakyan,

global data services practice leader for Asia Pacific at Towers

Watson. In the top positions, that exceeded 30 percent, he said.

“Singapore is going to be more expensive to live in,”

Rakyan said in an interview yesterday. “You need to compensate

for the higher cost of living in the particular country. The

implications are also in terms of the tax rate,” as companies

pay more to make up for higher personal income taxes in

Singapore, he said.

Singapore ranked one spot above Hong Kong as the fifth-most

expensive location for expatriates out of 214 cities in Mercer

LLC’s 2013 Cost of Living Rankings. Singapore’s top marginal tax

rate on personal income is 20 percent, compared to Hong Kong’s
15 percent.

The Southeast Asian nation is also Asia’s most expensive

city for luxury homes after Hong Kong, according to Knight Frank

LLP. While housing values dropped 4.3 percent from their high in

Hong Kong, according to Centaline Property Agency Ltd.’s index,

government data showed prices in Singapore slipped just 0.9

percent last quarter from its peak.

Best Place

Hong Kong is the world’s best place for doing business,

according to Bloomberg Rankings. Singapore’s ranked No. 4, also

trailing Canada and the U.S. Singapore is forecast to be the

world’s third-most competitive city by 2025, ahead of Hong Kong

at fourth, according to a report by the Economist Intelligence

Unit commissioned by Citigroup Inc.

The expansion of Singapore’s private banking industry and

the presence of regional hubs of global companies have drawn

more top talent and boosted the pay of the so-called C-suite,

which includes chief executive officers, chief financial officer

and other senior managers.

The rising costs in Singapore led the government to

announce a S$9 billion ($7 billion) spending package last week

on health care and other benefits for the elderly, while

providing companies with more funds to increase efficiency as

the economy adjusts to a tighter labor supply.

Low Unemployment

The island’s unemployment rate held at 1.8 percent in the

three months through December, matching a five-year low reached

in the last quarter of 2012. Singapore said in September it

would widen foreign-worker curbs to professional jobs as the

government clamps down on companies that hire overseas talent at

the expense of local citizens, stepping up efforts to counter a

backlash against immigration.

Hong Kong’s unemployment rate for the three months ended

January fell to 3.1 percent from 3.2 percent in the last period,

the government said in a statement on Feb. 18.

“The talent gap is still quite high,” Rakyan said.

“Companies feel that at the top level, if they can have someone

who is more experienced and understands their business strategy,

it’s worth bringing them onboard. So we will continue to see a

lot of expat talent.”

To contact the reporter on this story:

Sharon Chen in Singapore at

schen462@bloomberg.net

To contact the editor responsible for this story:

Linus Chua at

lchua@bloomberg.net

Singapore Top Executive Pay Beats Hong Kong as Living Costs Jump