Piyush Gupta,Chief Executive Officer, DBS Bank’
Last year’s outages at DBS that saw payment and ATM transactions stalled across the city-state also resulted in the variable compensation for the group management committee collectively cut by 21 per cent from a year earlier
Singapore:
DBS Group Holdings Ltd. slashed Chief Executive Officer Piyush Gupta’s compensation by S$4.1 million ($3 million) after the lender suffered a series of digital banking outages last year and was reprimanded by the central bank.
The pay cut, announced on Wednesday alongside DBS earnings, represents a 30 per cent reduction in variable pay for Gupta, one of the highest paid executives in the country who earned S$15.4 million in total in 2022.
Last year’s outages that saw payment and ATM transactions stalled across the city-state also resulted in the variable compensation for the group management committee collectively cut by 21 per cent from a year earlier.
“We’ve taken accountability,” Gupta said at an earnings briefing. “I think that’s a good element of governance.”
The pay fallout came even though DBS’ full-year results hit a record. The bank’s net profit for 2023 exceeded S$10 billion, a target it had set for itself for the medium term. It posted return on equity of 18 per cent. The lender also proposed a bonus share issue and raised its final dividend, and said it saw opportunities to return more to shareholders this year.
DBS shares rose as much as 2.8 per cent, the most in six weeks, out-pacing the city-state benchmark stock index.
“The heavy punishing move highlights the management’s commitment to minimise future disruptions,” Yeap Jun Rong, a market analyst at IG, wrote in a note about the pay cuts. Yeap also noted that DBS’ level of dividend yield towers above its peers, setting up expectations for others to follow.
In November, the Monetary Authority of Singapore had banned DBS from acquiring new business ventures and reducing local branch and ATM networks for six months after a spate of digital banking service outages.
The actions followed repeated and prolonged disruptions of DBS’ online banking services last year, prompting Gupta to apologize to customers and assure them the bank is addressing the issues “with utmost priority.” DBS said on Wednesday customers can expect greater service reliability, as well as alternative channels for payments and enquiries should issues happen.
Under Gupta’s leadership since November 2009, DBS has expanded operations in India, Taiwan, and mainland China through acquisitions and organic growth. He has also beefed up the bank’s wealth management business, which is now one of the largest in Asia in terms of assets under management.
Gupta said that even though interest rates are expected to soften and geopolitical tensions to persist, the bank should sustain its performance in the coming year.
Bloomberg