SOME Singapore companies are falling short of transparency best practices when it comes to disclosing the pay of their top brass.

One in five companies did not comply with disclosure guidelines for directors' pay set out in the Code of Corporate Governance last year.

Even more failed to comply for top executives, according to a study of 280 annual reports by consultancy Freshwater Advisers.

Freshwater also reviewed 100 annual reports released this year and found that 25 per cent of firms did not follow the guideline for directors.

Freshwater said the guidelines are 'comparatively light' compared to those of Western countries.

The code states that annual reports should 'set out the names of directors and at least the top five key executives (who are not also directors) earning remuneration which fall within bands of $250,000'.

It also suggests that firms 'fully disclose the remuneration of each individual director'.

Remuneration refers to total pay, comprising take-home salary, bonuses, allowances and other incentives.

Singapore follows a 'comply or explain' regime, regarding the Code of Corporate Governance.

Companies that do not follow the guidelines simply need to explain why, in their corporate governance reports.

Firms that ignore the code often choose to do the bare minimum to avoid problems, and follow the listing rules of the Singapore Exchange (SGX).

SGX rules state that firms must disclose the number of directors and key executives with compensation that falls within three bands - below $250,000, $250,000 to below $500,000 and $500,000 and above.

Unlike the Corporate Governance Code, there are no upper limits to the '$500,000 and above' band, so directors placed there could actually be earning a lot more than $500,000 without shareholders knowing.

And while the code suggests naming the directors in each band, SGX rules state that firms need only provide the number of their top brass in each band.

There has been a move to amend the listing rules to make disclosure as recommended in the code 'the minimum'. The consultation closed in January last year and the approval is pending.

Osim International is one firm not following the code. Its latest annual report set out the number of directors in $250,000 bands and had no upper limit for the '$500,000 and above' band.

'For competitive reasons, the company is not disclosing each individual director's remuneration,' said Osim's report. The company's spokesmen were out of town and could not be reached for comment.

Roxy-Pacific Holdings did slightly better. It retained the '$500,000 and above' band, but named the five executive directors in that pay scale. It also broke down, in percentage terms, compensation into components like salary and bonuses - another recommendation of the code.

'We have been advised by our (external) company secretary that the disclosure in our annual report exceeds that of many other companies,' said a Roxy-Pacific spokesman.

'It's true that there's a variation; some disclose very little, and some disclose a lot more. This could be due to different interpretations of the listing rules and Code of Corporate Governance.'

Many companies say the 'patchy' disclosure of executive pay is to avoid giving away competitive information or making management targets for headhunters, said Freshwater.

But National University of Singapore professor Mak Yuen Teen, who monitors corporate governance issues, rejected this argument: 'If you want to poach people, you can easily find out how much they get paid. There are search firms that do this - companies don't look at annual reports when they want to headhunt people.

'In terms of senior directors' or executives' pay, there is not enough transparency.'

Prof Mak said a major worry is regarding companies where the founding family holds a major stake, giving them the power to influence their own pay via controlling the board and remuneration committee.

'When they don't disclose the pay, you won't know how much money they are taking. They could be overpaying themselves, leaving less money for minority shareholders.'

But not all companies are failing. Ms Julia Ann Smith, executive director of human capital at Ernst & Young, said the criticism of companies falling short of disclosure standards 'is true of some, but certainly not all Singapore companies'.

She said a study by her firm last year found that of the largest 15 Singapore companies, four go beyond the Corporate Governance Code and disclose actual executive compensation.