Illustration of Wealth Added
–Change in net
present value of
Wealth Added = Change in market value of investment
+ Dividend received from investment
– Net capital injection into investment
– Risk adjusted hurdle of investment
– Change in net present value of operational cost
Wealth Added (WA) is our dollar returns above a risk-adjusted hurdle. Investments in riskier sectors or markets have higher hurdles.
Total WA is the sum of all our individual investment WA, adjusted for changes in the net present value of our operating costs.
When WA is positive, we have a positive WA bonus pool to share. Part of this WA bonus pool is deferred to future years. When WA is negative, i.e. when returns are below our risk-adjusted hurdle in aggregate, we share a negative bonus pool. This means a clawback of the deferred bonuses earned in prior years, and if needed, from future bonus pools as well.
Our WA was S$25.5 billion for the year.