Starhub Compensation Project

SENIOR MANAGEMENT PERFORMANCE REVIEW

NazKee YannKarynBaoyun ParkapanBy:

1Sunday, April 1, 12

Content

1. Pay Package Review2.Balance Scorecard for Starhub3.Implementation


Pay Package Review


!$#!!

!$300,000!!

!$600,000!!

!$900,000!!

!$1,200,000!!

!$1,500,000!!

!$1,800,000!!

!$2,100,000!!

!$2,400,000!!

Chan!Kin!Hung!(Head,!Products!&!SoluCons)!

Ng!Long!Shyang!(Head,!Sales!&!MarkeCng)!

Diana!Lee!(Head,!Customer!Service)!

Kwek!Buck!Chye!(CFO)! Tan!Tong!Hai!(COO)! Neil!Montefiore!(CEO)!

Benefits#in#kind!

Variable!(Performance!Bonus!Scheme!&!EVA)!Fixed!

Band A Band B Band C Band D

•Performance Share Plan: Up to 103,500 shares•Restricted Stock Plan: Up to 48,000 shares

•Performance Share Plan: Up to 243,800 shares

•Restricted Stock Plan: Up to 106,500 shares

•Performance Share Plan: Up to 303,600 shares

•Restricted Stock Plan: Up to 264,000 shares

•Increase

Emphasis

on LT

Commitm

ent and P

erforman

ce


Aligning interest of senior management to shareholders

Motivateperformance

Motivate Long Term commitment

Internal equity

Cost control

Use of performance measures: Balance Scorecard (BSC) and periodic performance targets (short-, med- and long- term), benchmarked to Total Shareholder Return (TSR) measured against the MSCI Asia-Pac Telecommunications Index and Wealth Added which measures the investment performance in terms of TSR against shareholders’ expected returns (using cost of equity).

Through variable componentsShort-Term: Performance Bonus Scheme, Economic Value Added (EVA)Med-Term: Performance Share PlanLong-Term: Restricted Stock Plan

EVA: 1/3 payable annually, remaining payable upon resignation or termination of employment. Value is subjected to changes and is dependent on Company’s EVA performance.

Performance Share Plan: Actual number of shares given will be dependent on the level of achievement of the prescribed performance targets over a performance period, typically 3 years.

Restricted Stock Plan: Awards granted can only be vested after a satisfactory completion of time-base service conditions or after a further period of service beyond the performance target completion date.

Within the bands: Jobs within the same pay band receive similar pay packages. Across the bands: Size of total compensation increases in tandem with the increase in the importance and value of roles in the organization.

Competitive with market pay package. Done through variable pay, deferred payments and issuance of performance shares and restricted stocks.

ACUBE FACTOR ASSESSMENT REMARKS


Balance Scorecardfor Starhub


BALANCESCORECARDSTRATEGIC MANAGEMENTTOOL

“A management system that enablesorganizations to clarify their vision andstrategy and translate into action.”



Learning & Growth

Internal Process

Customer

Financial

Learning & Growth

Internal Process

Customer

Financial


Performance Measurements Strategic

Objectives


Learning & Growth

Internal Process

Customer

Financial

Learning & Growth

Internal Process

Customer

Financial


Limitations of ConventionalBalance Scorecard

“Focus on short term financial measures”

“Top down approach”

“Equal weightage for each

perspective”


“Focus on short term financial measures”

Generate

Tailor

Cascade

Refine

Limitations of ConventionalBalance Scorecard

“Top down approach”

“Equal weightage for each

perspective”


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level

BSC Strategic Business Unit Level

BSC Sub-Strategic Business Unit Level

GenerateTailor

CascadeRefine

CEOCOO


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Mission

VisionTo be Singapore’s first choice for information, communications and entertainment services.

To provide every person, home and business in Singapore with world-class multimedia services and content


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Create Long Term Shareholder Value

Revenue Growth

Operational ExcellenceEncourage Innovation

within Organizations

Managing Social & Environmental Impacts

Creation of Customer Value

Excellent & Optimal Customer

Management

Having a Well Trained & Motivated

Workforce

Maintaining Good Workplace Culture &

Diversity

Employee Satisfaction

Attract & Retain Talent


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Create Long Term Shareholder Value

Increase Productivity Revenue Growth

Operational Excellence

Encourage Innovation within Organizations




Management


Workforce


Diversity


Attract & Retain TalentLearning

& Growth

Internal Process

Customer

Financial


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Increase Productivity



Diversity



• Employee turnover eate• # of new applicants• Employer of choice

• Overall avg. training hours• Leadership development• Employee morale survey

• Employee culture score • Employee engagement

score survey• Workplace profile

• Employee satisfaction survey score

• Total service downtime • Internal rate of return from new product

• R&D expenses• Response time in reaction to

technological trends

• Environmental emissions (carbon footprint)• CSP presence• # of positive media• Amount of funding purposes (donations)• Amount of lawsuits• Energy use, fuel & water consumption• Sources of GHG Emissions

• Market survey of customer satisfaction value

• % of retention• % Starhub customer ratings• # of complaints

• Earning per share• Dividend per share• Profit attributable to shareholders• Total shareholder’s return

• Free cash flow• Total operating expenses

• EBITDA• Operating revenue

Measurements

LEA

RN

ING

&

GRO

WT

HIN

TER

NA

L PR

OC

ESS

CU

STO

MER

FIN

AN

CIA

LLE

AR

NIN

G &

G

ROW

TH

INT

ERN

AL

PRO

CES

SC

UST

OM

ERFI

NA

NC

IAL

Create Long Term Shareholder Value Revenue Growth



Management




Workforce

Objectives

Perspectives


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Mr. Tan oversees the day-to-day operations of the company and has direct responsibility of the company's Sales & Marketing, Products & Solutions, Enterprise Business, Customer Service, Network Engineering & Information Services, Wholesale & International Services and Government & Strategic Affairs divisions.

Chief Operating OfficerTan Tong Hai




Maintaining good work place culture &

diversity



• Employee Turnover Rate• # of new applicants• Employer of choice

• Overall avg. training hours• Leadership development

• Employee Culture score • Employee Engagement

score survey• workplace profile

• Employee satisfaction survey score

• Total service downtime • Internal rate of return from new product

• Response time in reaction to technological trends

• Environmental emissions (carbon footprint)

• Energy use, fuel & water consumption• Sources of GHG Emissions


• % of retention


• Free cash flow• Total operating expenses

• EBITDA• Operating eevenue

LEA

RN

ING

&

GRO

WT

HIN

TER

NA

L PR

OC

ESS

CU

STO

MER

FIN

AN

CIA

LLE

AR

NIN

G &

G

ROW

TH

INT

ERN

AL

PRO

CES

SC

UST

OM

ERFI

NA

NC

IAL




Management



COO


Workforce


• Plans and directs all aspects of an organization's policies, objectives, and initiatives.

• Responsible for the short- and long-term profitability and growth of the company.

• Relies on extensive experience and judgment to plan and accomplish goals.• Leads and directs the work of others. • A wide degree of creativity and latitude is expected.• May preside over board of directors

Chief Executive OfficerNeil Montefiore






• Employee turnover rate• # of new applicants• Employer of choice • Employee morale survey

• Employee culture score • Employee engagement

score survey• Workplace profile

• Employee Satisfaction Survey score

• Total service downtime

• R&D expenses• CSP presence• # of positive media• Amount of funding purposes (donations)• # of lawsuits

• market survey of customer satisfaction value

• % Starhub customer ratings• # of complaints


• Free Cash Flow• Total Operating expenses

• EBITDA• Operating revenue

LEA

RN

ING

&

GRO

WT

HIN

TER

NA

L PR

OC

ESS

CU

STO

MER

FIN

AN

CIA

LLE

AR

NIN

G &

G

ROW

TH

INT

ERN

AL

PRO

CES

SC

UST

OM

ERFI

NA

NC

IAL




Management



CEO


Workforce


Diversity


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Source: Niven, P.R. (1999), "Cascading the balanced scorecard: a case study on Nova Scotia Power, Inc.", Journal of Strategic Performance Measurement, Vol. 1 No.2, pp.5-12.


CORPORATE LEVEL (COO)CORPORATE LEVEL (COO)CORPORATE LEVEL (COO)PERSPECTIVE GOAL MEASURE

Financial Revenue Growth

• EBITDA • Operating Revenue

SBU LEVEL (HEAD OF SALES & MARKETING)SBU LEVEL (HEAD OF SALES & MARKETING)SBU LEVEL (HEAD OF SALES & MARKETING)

PERSPECTIVE GOAL MEASURE

Financial Revenue Growth

• Total Revenue from Services:• Revenue (Mobile)• Revenue (PayTV) • Revenue(Broadband) • Revenue (Data & Internet)


Internal Process Operational Excellence • Total service downtime



Internal ProcessRefine existing

operational practices

• Cost savings form operating expenses

• Repair & Maintenance expenses

Cascade


Mr. Ng heads the Sales & Marketing Division. He is in charge of sales and marketing for the company's products and services targeted at the consumer segment. His responsibilities include managing StarHub's distribution channels (including retail stores, partners and direct sales), sales fulfillment, mobile device merchandising, retail and segment marketing, brand management and marketing communications.

Head of Sales & MarketingNg Long Shyang



Revenue Growth

Increase Innovations within

Departments

Refine Existing Operational

Practices

Manage Distribution

Channels

Expand Bases of Customers

Provide Reliable & Value for Money

Products

Invest in People Development


Recognizing and Rewarding Employee

Contributions

• # of staff recognition awards given

• No. of hours for sales training clocked by employees

• Training ROI • Employee satisfaction

• New services/products introduced

• Rate of return from new services/products

• Cost savings form operating expenses

• Repair & maintenance expenses

• # of store openings in high traffic areas and also heartland mall

• Total # of household subscribing to 3 services (Hubbing Index)

• Total subscriber base for mobile, Pay TV, broadband

• Total # of new subscribers• Churn rate• % of market penetration of consumers

& Corp

• Quality of network• connectivity• Consumers brand

perception survey

• Measure employee productivity

• Total operating expenses

• Total revenue from services:•Revenue (Mobile)•Revenue (PayTV)•Revenue(Broadband)•Revenue (Data & Internet)

LEA

RN

ING

&

GRO

WT

HIN

TER

NA

L PR

OC

ESS

CU

STO

MER

FIN

AN

CIA

LLE

AR

NIN

G &

G

ROW

TH

INT

ERN

AL

PRO

CES

SC

UST

OM

ERFI

NA

NC

IAL

Enhance Customer Satisfaction

• Customer rating on level of satisfaction- Call center interaction- Technical services- Customer service centres

• # of complaints• Response time in service recovery

Meet the Needs of Coporate Clients

• Response time in meeting the needs

Smooth Flow of Implementing Next

Gen NBN

Raising Brand Awareness

• Meeting schedules for connection of households

• # connectivity lapses

• # of campaigns published

Head of Sales & Marketing

Head of Sales & Marketing


METHODOLOGY

Vision/Mission

Strategic Objective

Strategy Map

BSC Corporate Level



GenerateTailor

CascadeRefine

CEOCOO


Apply weightage to each quadrant of scores when calculating total score

‣Ensure that BSC score will be measured according to the importance of each of the 4 quadrants for respective roles

‣Overcome limitations of BSC’s weakness of not being able to prioritize goals and measure

Method:

Rationale:

Refine


CEO

30%

10%30%

30%

Financial Customer Internal Process Learning & Growth


COO20%

10%

50%

20%



30%

50%

10%10%


Head of sales & Marketing


SBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETING

PERSPECTIVE GOAL MEASURE TARGET SCORE WEIGHTAGE

FINANCIAL Revenue Growth

• Total Revenue from Services:• Revenue (Mobile)• Revenue (PayTV)• Revenue(Broadband)• Revenue (Data & Internet)

Total score for Financial: Total score for Financial: Total score for Financial: Total score for Financial:

CUSTOMER PERSPECTIVE

Provide reliable & value for money

products

• Quality of network• connectivity• Consumers brand perception survey

Total score for Customer Service: Total score for Customer Service: Total score for Customer Service: Total score for Customer Service:

INTERNAL PROCESS

Refine existing operational practices

• Cost savings form operating expenses• Repair & Maintenance expenses

Total score for Internal ProcessTotal score for Internal ProcessTotal score for Internal ProcessTotal score for Internal Process

LEARNING & GROWTH

Invest in people development


• Training ROI

Total score for Learning & GrowthTotal score for Learning & GrowthTotal score for Learning & GrowthTotal score for Learning & Growth

30%

10%

50%

10%

A

B

C

D

Score will be based on how well they have achieved their

target.

100 = Meeting target<100 = Missing target

>100 = Exceeding target


SBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETINGSBU LEVEL HEAD OF SALES & MARKETING

PERSPECTIVE GOAL MEASURE TARGET SCORE WEIGHTAGE

FINANCIAL Revenue Growth

• Total Revenue from Services:• Revenue (Mobile)• Revenue (PayTV)• Revenue(Broadband)• Revenue (Data & Internet)

Total score for Financial: Total score for Financial: Total score for Financial: Total score for Financial:


Provide reliable & value for money

products

• Quality of network• connectivity• Consumers brand perception survey

Total score for Customer Service: Total score for Customer Service: Total score for Customer Service: Total score for Customer Service:

INTERNAL PROCESS

Refine existing operational practices

• Cost savings form operating expenses• Repair & Maintenance expenses

Total score for Internal ProcessTotal score for Internal ProcessTotal score for Internal ProcessTotal score for Internal Process

LEARNING & GROWTH

Invest in people development


• Training ROI

Total score for Learning & GrowthTotal score for Learning & GrowthTotal score for Learning & GrowthTotal score for Learning & Growth

A 30% B 50% C 10% D 10%Total Score: X X X X+ + +


ImplementationBalance Scorecard


Communicate

Create Cascade

Acube 3 C’s


Communicate

REVIEW & REVISIONManagement interview: Examine strategy & make relevant changes to Corporate level BSC

Conducting workshops: Communicate to all involved in creating BSC

Estimated Duration: 2 wks

Acube 3 C’s


ROLL OUT COMPANY WIDEUsing the Corporate level BSC, implement BSC down to Business and Sub-business Units levels.





Enhance customer

satisfaction

• Overall customer satisfaction rating

• Overall % of customer complaints

SUB- SBU LEVEL (MARKETING MANAGER)SUB- SBU LEVEL (MARKETING MANAGER)SUB- SBU LEVEL (MARKETING MANAGER)PERSPECTIVE GOAL MEASURE


Enhance customer

satisfaction

• Customer rating on level of satisfaction‣ Call center interaction‣ Technical services‣ Customer service centres

• # of complaints• Response time in service

recovery



Creation of customer value


Cascade


Communicate

Create

REVIEW & REVISIONManagement interview: Examine strategy & make relevant changes to Corporate level BSC

Conducting workshops: Communicate to all involved in creating BSC


ROLL OUT COMPANY WIDEUsing the Corporate level BSC, implement BSC down to Business and Sub-business Units levels.


PERFORMING TASKEmployees carry their duty based on their goals in the BSC

Managers give performance rating based on measures & targets in BSC

Estimated Duration: 10.5 mths

Cascade

Acube 3 C’s


Thank You Questions?


Starhub Compensation Project

Education

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