Source: Todayonline 2 Jul 2012
by Conrad Raj
One wonders why CapitaLand Holdings is spending money, time and effort engaging a headhunter to look for a replacement for outgoing President and Chief Executive Liew Mun Leong, who will retire in a year’s time when he turns 67.
On June 22, CapitaLand announced that Mr Liew would not be seeking a further extension to his appointment as head honcho of Southeast Asia’s largest real-estate company.
Mr Liew had already served two extensions, totalling five years, to his term at the helm of CapitaLand. So, one would have assumed that a successor would be in place the moment Mr Liew announced his retirement.
But in the current fashion of our top government-linked companies, a headhunting firm has been engaged to scour the earth for a successor.
CapitaLand had said that Friday: “Succession planning has been institutionalised in Pidemco (which merged with DBS Land in 2000 to form CapitaLand) and CapitaLand for many years. As part of the succession planning process and in line with best practices, a Board Succession Committee will review the internal and external candidates to succeed Mr Liew when he retires on June 28, 2013.”
Mr Liew himself had said: “All my chiefs can succeed me. All my CEOs have potential – the CFO, CIO, COO.”
They would be Chief Financial Officer Olivier Lim, Chief Investment Officer Arthur Lang and Chief Operating Officer Lim Ming Yan.
Analyst Michael Lim of UBS Securities said: “We think Group COO Lim Ming Yan is a natural candidate and possesses the relevant property experience having previously held the position of CEO of CapitaLand China Holdings and spearheaded the group’s China initiatives.”
CapitaLand has also noted Mr Lim’s credentials. On his appointment as COO, the company said: “In his present role as CEO of Ascott, Ming Yan’s focus has been on transforming Ascott into a real-estate company with a global footprint in the hospitality sector and to realise Ascott’s potential for portfolio gains. Ming Yan has a proven track record of successfully operating and implementing projects in China, India, South-east Asia, the Middle East and Europe.”
WHY LOOK OUTSIDE?
If these men are potential successors, why bother looking outside?
Not all outsiders have succeeded in their task of helming a GLC. Just look at the experiences of local banking giant DBS Holdings and national carrier Neptune Orient Lines.
Temasek itself parted ways with American Charles Goodyear even before he took over the helm of the sovereign wealth fund.
In fact, CapitaLand has a policy of getting all its team heads to name at least two persons below them as potential successors.
Mr Liew has named his potential successors. Shouldn’t the board have been evaluating his choices all these years and come to a quick decision on naming their pick?
For sure, the board may eventually indeed appoint somebody from within CapitaLand to succeed Mr Liew. But, in the meantime, why spend time and shareholder money in the global search for a new successor?
Succession planning, as the term implies, is all about identifying, grooming and putting a successor in place even before the vacancy surfaces and needs to be filled.
It is not about fulfilling so-called best practices in starting a search and reviewing internal and external candidates for a post. External candidates should have been talent-spotted and put in place long before a person vacates his post.
CEO PAY LEVELS
Let’s face it: The current level of CEO compensation in Singapore – last year, at the highest level, it was between S$5 million and S$10 million – is unlikely to attract the very best, perhaps not even second-tier global candidates.
In the US such compensation is considered piddling even by today’s standards when excessive CEO compensation has come under scrutiny and attack from the authorities and shareholders there.
A few years ago, Mr Liew himself was paid what was considered here in Singapore a hefty (some said exorbitant) sum of S$21 million. That came in for a lot of criticism and, in the last couple of years, he earned less than S$7 million a year.
In any case, if foreign companies can recognise the top qualities of Singaporeans like Michael Kok, CEO of Dairy Farm International, and Bhupinder Singh Gill, President of CME Group Inc (formed by the 2007 merger of the Chicago Mercantile Exchange and the Chicago Board of Trade), then why can’t Singapore-based companies recognise local talent as being worthy of more than just the Number Two spot?
Conrad Raj is TODAY’s editor-at-large.
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