SGX Regco Proposes Mandatory CEO Pay Disclosure Rules for Singapore Listed Firms

Singapore’s financial regulator, SGX Regulation (SGX Regco), on April 22 proposed requiring listed companies to disclose the factors used to determine executive pay in their annual reports, addressing a significant transparency gap in the market. Currently, over 60 per cent of the largest listed companies do not publicly disclose the performance and financial indicators that determine their executive directors’ pay, according to SGX Regco. This lack of transparency creates an information gap between companies and investors that could erode investor confidence and prevent shareholders from making informed judgements on company and management performance.

Mandatory Disclosure of Performance Indicators

Under current regulations, companies only have to disclose the remuneration of directors and the chief executive officer in their annual reports, a requirement mandated in 2023 for financial years ending on or after December 31, 2024. However, the factors determining executives’ remuneration have a direct bearing on management behaviour and corporate decision-making.

SGX Regco’s proposal would require companies to disclose factors used to determine executive pay, which could include total shareholder return and return on equity, as well as operational and sustainability metrics such as on-time delivery rates, customer satisfaction and emissions levels. Listed companies would have to explain the alignment between their chosen indicators and long-term value creation objectives, taking into account their strategy and circumstances.

The proposed disclosure requirement would not apply to non-executive directors, who are typically paid in fixed fees, as they are not involved in the day-to-day management of the company and the execution of its strategy.

“Insufficient disclosures can create risks for both companies and capital markets as they heighten perceptions of governance risk, weaken investor trust and exacerbate information asymmetry,” said Mr Lee Wei Hock, Singapore assurance leader at EY. “When remuneration disclosures articulate how incentives support sustainable growth, risk management and capital discipline, they help investors better assess management quality and future performance potential.”

SGX RegCo said its proposal comes after investors expressed a strong interest in “understanding the indicators that would determine such remuneration, and how these indicators relate to the company’s long-term value creation objectives.”

Transparent Dividend Policy

Beyond pay disclosures, companies will also need to set out their dividend policy, showing how they plan to use profits to create value for investors. SGX Regco said a “sizeable proportion of issuers” have elected not to disclose their dividend policy, which could undermine investor confidence and contribute to persistent valuation discounts.

The regulator added that the proposed new rule does not mandate that a dividend must be paid, nor does it prescribe any particular dividend approach, payout ratio or quantified target. However, companies that currently do not have a fixed dividend policy would be required to adopt and disclose one. Issuers would also be required to explain the reasons for any deviation from their dividend policy.

Mr David Gerald, president and chief executive of the Securities Investors Association (Singapore), said the new regulation would help investors better understand how boards balance reinvestment, capital needs and shareholder returns. “Investors now want clear, consistent information that goes beyond past results to explain how companies manage risks, execute strategy and create long-term value. High‑quality disclosures can help investors better evaluate the company’s resilience, adaptability and ambition, and signals accountability from the leaders of the organisation and preparedness in a complex environment.”

Mandatory Investor Relations

Under the proposal, listed companies must disclose and maintain an investor relations policy to facilitate regular two-way communication with investors. Such engagement activities must also be listed in their annual reports.

Companies will also be required to maintain a website that would serve as a readily accessible and centralised platform for key investor-facing information and documents, such as annual reports and annual general meeting minutes. Issuers are also encouraged to disclose on their websites meaningful investor feedback and how it has been incorporated into decision-making.

Mr Ong Hwee Li, chief executive of SAC Capital, noted that current gaps in the investor relations space would need to be addressed for the new regulations to work. “There is currently no requirement for issuers to engage investor relations firms or hire dedicated personnel for such roles. As such, only larger issuers typically have investor relations teams as they have a broader institutional investor base and a greater need for consistent investor communication compared with smaller firms.”

Implementation Timeline and Broader Reforms

Better remuneration disclosure was among a set of proposals that SGX RegCo put forth for public consultation, which also included mandatory disclosure for dividend policies and enforcing investor relations platforms. The consultation phase will end on May 22 and the new rules are expected to be implemented in phases from January 1, 2027, thus affecting annual reports filed in 2028.

The regulator said its proposals aim to raise disclosure standards and push companies to focus more on creating value for shareholders. This will complement the broader set of measures to revitalise Singapore’s equities market, such as the $30 million Value Unlock initiative offering two grants to help firms improve their corporate strategy and step up their investor relations.

SGX RegCo chief executive Tan Boon Gin said: “Our job as regulators is to promote transparency, motivate best practices and drive market discipline. We see these rules as pushing both boards and shareholders to think more about value creation and forming a foundation for two-way engagement.”

Mr Lee said that the impact of the proposals would ultimately depend on the quality and intent behind these disclosures. “Company disclosures should clearly explain how governance decisions support long‑term value creation, capital discipline and sustainable performance, rather than simply meeting minimum disclosure requirements.”

Mr Ong added that consistency in performance and investor relations efforts strengthens credibility over time. “When issuers are consistent in both their performance and investor relations efforts, it strengthens credibility over time. This consistency builds investor trust, which can support stronger investor confidence. Issuers enjoy better valuations in the long run.”