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
