SINGAPORE (THE BUSINESS TIMES) – DBS Group’s chief executive Piyush Gupta saw his pay fall 24 per cent to $9.18 million in 2020 as the Covid-19 pandemic took a bite out of bank earnings, according to the bank’s annual report on Monday (March 8).
His total compensation in 2019 was $12.13 million, which equates to a reduction of about $2.94 million for the amount received last year.
In the report, it was noted that the drop in the bonus was attributed to the difficult operating environment, general cutbacks adopted across the bank and the reduction in the lender’s profits by 26 per cent. This was due to a quadrupling of provisions as general allowances were set aside for asset quality risks arising from the pandemic.
Mr Gupta’s pay in 2020 consisted of a cash bonus of $3.41 million, slashed by 27 per cent, and shares worth $4.51 million, on top of a salary base of $1.2 million. The base salary was unchanged for the year. It also includes a non-cash component of $62,130.
The share plan amounting to $4.51 million excludes the estimated value of retention shares amounting to $901,460, which serve as a retention tool and compensate staff for the time value of deferral. This comes as at DBS, ordinary dividends on unvested shares do not accrue to employees.
In the report, Mr Gupta wrote that 2020 was “indeed an inflexion point” in three key ways – acceleration of digital adoption, transformation in work habits, and a greater push of the sustainability agenda.
These trends have far-reaching implications on banking, he noted.
“In the early days of the crisis, many leaders suggested that the day of the ‘office’ was over, and remote working would be the new norm,” said Mr Gupta. “I did not agree, believing that at heart, we are social creatures.”
However, he said that the bank will not go back to the old ways of working. Among the changes that the lender sees in the “future of work” is that the workforce will be more distributed by location.
“The different ‘lockdown’ requirements in different countries and markets showed us that concentrating large pools of employees in a single location comes with unforeseen risks,” he said. “The ability to connect people from remote locations to our entire infrastructure created the possibility that we could have smaller teams of people work for us from regions where suitable talent is abundant.”
As such, the bank is revisiting locations of its incremental engineering resources, he said.
Even as DBS faces a double whammy of low interest rates and asset quality risks in its journey ahead, Mr Gupta believes that there are still bright spots, with fee income likely to benefit, especially wealth management.
Digitalisation will also bring additional growth prospects, he noted.
“The accelerated adoption of digital behaviours by customers creates opportunities for market share gains,” Mr Gupta said. “There will also be new business opportunities, such as the Digital Exchange we launched in the fourth quarter.”
The members-only exchange, available to institutional and accredited investors, includes a platform for the issuance and trading of tokenised digital assets, the provision of digital custodial services, as well as a crypto trading platform. This is aimed at riding on the growing appetite for digital assets.