Apart from competitive base salaries, familyfriendly benefits and performance target bonuses, we align rewards and risks with our staff through our Wealth Added (WA) incentives.

Wealth Added Incentives

When Temasek achieves positive WA or excess returns above the risk-adjusted hurdles, particularly from our direct investment activities, a portion of the attributable WA is set aside as a staff WA incentive pool following the close of the financial year and the approval of the audited statutory accounts. Similarly, another portion is set aside for our contribution to the community.

One part of the WA incentive pool funds our Wealth Added Bonus plan. This cash incentive plan includes deferred payments that are subject to the future performance of the company. Distribution of this incentive is in accordance to the contributions made by the individuals. The individually earned bonus is credited to the notional WA bonus bank of the participating staff. The junior staff will get a larger cash payout from their bonus bank, while key management staff will have half or more of their earned WA bonus deferred to future years. Of the deferred portion, half will be retained in the bonus bank for future years, and half allocated in the form of Restricted Staff Co-investment Plan (R-Scope) units, which grow or decline with the total shareholder returns achieved, as they vest over the ensuing three years.

Another part of the WA incentive pool funds the Temasek Staff Co-investment Plan (T-Scope). These T-Scope units will grow or decline with Temasek’s returns over 12 years. If Temasek exceeds the specified hurdles over a performance period of three to five years, the T-Scope units will start to vest equally over five years thereafter. Otherwise, the T-Scope units will lapse. Upon vesting, staff may choose to re-invest their units with Temasek for up to 12 years from the commencement year.

The balance of the WA incentive pool has been retained over the past years for a long-term plan that is under consideration.

In the event of a negative WA for the year, a corresponding negative share will be deducted from the individual WA bonus bank before further payouts are made. No new T-Scope units for the year will be awarded.

Thus, the wealth added we create for Temasek determines the size of the incentive pie for our staff, while the sustainability of wealth creation shapes the medium to long-term rewards and risks for our staff in the form of deferred bonuses, R-Scope and T-Scope units.