Singapore Expats Forum

data about compensation of high-tech expat

Discuss your views about Singapore business & economy, current policies & issues, starting a business in Singapore.
newcorp
Newbie
Newbie
Posts: 8
Joined: Sat, 30 May 2009

data about compensation of high-tech expat

Postby newcorp » Sat, 30 May 2009 8:49 pm

We're a European software company considering relocating an executive of ours to Singapore to start our APAC operations there. This is likely to be something like a VP of Marketing & Business Development.
We understand that we'll need to cover this persons education, healthcare and rental costs (and have decent data around that). What we are trying to figure out is the following:
1. Salary – considering the that the employee might be subject to taxation by his home country's tax authorities (at "European rates" that are considerably higher than Singapore's) and that we'd be covering education, healthcare and rent on top his/her salary, what would a fair salary be for such an executive (again, a tenured high-tech VP Marketing/Business Development). Please indicate if you and answering in USD or SGD.

2. What other T&C (on top of education, healthcare and rent) is it common to provide such a person/position. Specifically, what about the following:
- What is it the acceptable level of a relocation (settling in) bonus?
- Do companies using pay for some activity (e.g. education) for the employees spouse?
- Transportation - How much should the employee get paid towards a car. And would he also be entitled to expense work related transportation (e.g. taxi to a client meeting) on top of the car budget.
- Who covers other school related costs (uniform, trips, food)?
- Who pays the home utilities (electrical, water, gas) and communications?

Many thanks for your help!

User avatar
ksl
Governor
Governor
Posts: 6005
Joined: Mon, 19 Jul 2004
Location: Singapore
Contact:

Postby ksl » Sun, 31 May 2009 2:52 am

Have you considered an alternative, to what you are proposing? Maybe a new business venture, that provides a service to your company? Think about the most cost effective way, of setting up in Singapore, rather than just extending your arm.
If the guy is that good, make him earn his keep, you outlay the investment but what are you getting in return? give him a share maybe.

Expatriates expect to be looked after, this place can be heaven or hell for non Asians, education for kids at the International School is expected, a VP obviously needs a car, my suggestion is to look at it from different angles, and see what is or not feasible, in terms of costs and expectations. It maybe more beneficial to set up a new company

newcorp
Newbie
Newbie
Posts: 8
Joined: Sat, 30 May 2009

thanks for the feedback, still need compensation data

Postby newcorp » Sun, 31 May 2009 3:20 am

DrinkingViniger, thanks for your feedback
This guy is a shareholder in the company and consequently will own a share of the Singapore subsidiray regardless. We could give him a bigger stake in it, but either way unless he is the sole owner of the enitity (which we wouldn't want to do) we'd need to know what a fair salary (& expat package) would be.

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10413
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Postby Strong Eagle » Sun, 31 May 2009 1:21 pm

I think you are asking the wrong questions. What is he worth and what level of compensation is required to keep him at a similar style and level of living that he has right now.

It is impossible to answer your question, how much should he be paid, because I don't know which are apples and which are oranges. I know senior executives in MNC's (computer related) that make US$ 400,000 and more with bonuses, plus school and housing allowances. I know of a tech sales manager for the region pulling down similar coin.

Here is one hypothetical. Since he is your exec and part owner you probably could not reduce his salary, even though the cost of consumption here might be lower than Europe. So, I'd simply translate his current salary into Singapore dollars and call that the base.

Then, you add a provision to pick up any Euro taxes on the amount.

Then you look at housing costs as a percentage of income as compared to housing cost percentages in Europe. Add a housing allowance as required to bring the two percentages back in line.

Private schooling is the preferred approach for senior expats, so add S$21,000 to S$29,000 (American School) per child, per year, unless your exec is paying tuition in Europe, in which case, adjust for percentage of income again.

A car is at least 2.5 times as much to purchase as in the US. If you want your exec to have a car, consider a one off allowance to pay for registration (110 percent of purchase value) and COE (around $18,000, good for 10 years). So, for a Mercedes you would allocate around S$140,000. As a policy I do not pay taxi fares for 'standard' travel... to and from the work place but do pay parking and/or taxi for meetings, etc.

Expat health insurance is the norm. This usually includes evacuation coverage if he is in health resource poor country, and repatriation back home for some diseases. Check out http://www.goodhealthworldwide.com/ for coverage.

Other odds and ends: Two or three trips home per year, some amount of paid vacation time, business class travel, perks like membership in the Tanglin or American or Britich clubs... or a golf and country club... activities and connections for spouse and children.

Most of the time, the questions come from the expat... what should I ask for? All the things you mentioned could be included but I would offer as base a package as possible with as few frills as possible and work up as required to get the man to move.

newcorp
Newbie
Newbie
Posts: 8
Joined: Sat, 30 May 2009

Thanks... keep em flowing

Postby newcorp » Mon, 01 Jun 2009 3:20 am

Strong Eagle - thanks for your well thought out answer. One of the issues is that this guys wife also generates some decent income for their household which she wouldn't be doing in Singapore, and if we look at the wanted to match their household income as it is today (and assume they might be subject to the same (home) tax rate) - the cost might become prohbitive.
Hence the reason we're looking for an external benchmark. We're definitely not a 400K, Business Class, Mercedes kind of company - we're pretty relentless about keeping our costs low (even pre-recession).

so any other feedback that you or others could provide would still be helpful.

Thanks again!

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10413
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Postby Strong Eagle » Mon, 01 Jun 2009 9:48 am

So... without children you can live quite a decent middle class life style with a condo and a car for around S$150,000. For around S$240,000 a family should be able to live a nice upper middle class life style with a semi-detached house or top notch condo as well as tuition for 2 kids and a nice car.

Note that starting salaries for local college grads are often in the S$2,000 to S$3,000 per month range, and skilled technical people with several years of experience are in the S$6K to S$8K range. Highly skilled senior people such as operations managers and project managers can command S$240,000 per year... this is getting into a more rarefied level.

More and more companies are removing the expat package perks, although Short Term Stays... the ones climbing the corporate ladder... continue to get a package. But there are also many mid to upper level people that come on a much simpler package the permits a similar lifestyle to where they were before. Singapore is a very good place to live.

Trailing spouses are always an issue. Many find it difficult to find work (especially in this recession) and if they do find work, it is often at a lower level than they held previously. OTOH, if she is skilled and in an 'in demand' field she could find work.

Just for fun you might also drop over to jobsdb.com.sg. There are lots of BS agency jobs there but also quite a few company direct hires... you'll see what the ranges offered are.

Finally, have you considered using someone already here to fill the role? There are many skilled expats who live here by choice, on a local package, often with PR or PEP, who could fill the role, saving relocation costs at a minimum, and possibly a lot more.

AngMoKio
Regular
Regular
Posts: 91
Joined: Mon, 27 Apr 2009

Postby AngMoKio » Wed, 03 Jun 2009 2:00 am

Strong Eagle wrote:Finally, have you considered using someone already here to fill the role? There are many skilled expats who live here by choice, on a local package, often with PR or PEP, who could fill the role, saving relocation costs at a minimum, and possibly a lot more.


As I resemble that remark - I am a highly skilled software engineer on a non-expat package - I thought I would comment.

I honestly can't imagine why anyone would bother paying some of the expat salaries I hear rumored. Unless the person is critical to the success of the business due to some sort of domain knowledge there is enough highly skilled local talent to create a very competitive firm at some very competitive salaries.

Also, I notice more and more of the big MNCs here in Singapore are sending the expats back home in favor of hiring locally (or at least people who want to be here rather then people who have been drug here through high compensation.)


  • Similar Topics
    Replies
    Views
    Last post

Return to “Business in Singapore”

Who is online

Users browsing this forum: No registered users and 1 guest