In Singapore, currently there are generally no legal requirements mandating salary transparency for private sector employees. Traditionally, a lack of salary transparency is fairly standard and present on both ends of the employment spectrum – i.e. both by companies, and by workers themselves being unwilling to disclose how much they are paid.
Companies in Singapore are generally unwilling to reveal levels of remuneration due to confidentiality concerns; the desire to prevent internal comparison and maintain morale; to prevent poaching, and to prevent upward pressure on remuneration due to market comparison, among other reasons.
Workers are traditionally reluctant to share how much they earn because salary is often perceived as private and confidential. People traditionally view talking about money including salary levels, to be distasteful from a cultural perspective, and this in turn contributes towards a lack of salary transparency in Singapore. In addition, there is a view that income should never be divulged in a social situation as it may affect the self-worth of others and could also be seen as arrogant behaviour.
In spite of this, there are there is a gradual shift towards increasing salary transparency in Singapore, particularly for companies listed on the Singapore Exchange.
Listed company director and CEO salaries
The Code of Corporate Governance (Code) currently applies to all companies listed on the Singapore Exchange on a ‘comply or explain’ basis. In other words, Singapore Exchange listed companies are required to comply as far as possible with the principles of the Code, but if their practices do vary from any provisions of the Code, they must explain both the provisions from which their practices have varied and the reasons for such variation.
The Code currently sets out requirements for the salaries of directors and certain senior employees to be disclosed. Based on a 2022 study, it was found that only 53% of the Singapore Exchange listed companies polled had made such disclosures.
In January 2023, however, it was announced that there would be some amendments to the Singapore Exchange listing rules and Code. Under the new rule, it is mandatory to disclose the exact amount and breakdown of salaries and other payments made to directors and chief executive officers in their annual reports. The new rule takes effect for annual reports prepared for the financial years ending on or after 31 December 2024.
The new mandate was introduced with the intended goal of boosting corporate transparency over remuneration, and to align disclosure practices with global standards.
Legislative developments for anti-discrimination
Furthermore, there are currently plans for workplace discrimination laws to be put in place in Singapore. Under the proposed changes, rules will be implemented to protect workers against discrimination based on age, nationality, sex, marital status, pregnancy status, caregiving responsibilities, race, religion, language, disability, and mental health conditions.
Although the proposed measure does not directly address the issue of salary transparency, it is expected that this may improve salary fairness, which is one of the aims of salary transparency, as employers would have to ensure that salaries are paid in a fair manner, and that there are no discriminatory considerations taken into account when deciding on an employee’s salary.
Notably, despite traditional cultural beliefs that it is not appropriate to discuss matters related to money, surveys have shown that attitudes may be starting to shift with the younger generation. There is a newfound belief that concealing salary information will put workers at a disadvantage when it comes to pay negotiations, as they are unable to ascertain the true market rate for the role they are applying for.
Further, many younger people take the view that companies are put at an advantage as they can leverage the informational asymmetry to keep wages down. Thus, among the younger generation, it is generally accepted that enhancing salary transparency by openly discussing salaries would, contrary to past beliefs, improve overall worker welfare.