Temasek Slashes Senior Staff Compensation Over Failed $257M FTX Investment

Temasek Slashes Senior Staff Compensation Over Failed $257M FTX Investment

Singapore investment firm Temasek Holdings has cut the compensation of its senior management and the investment team following a staggering $275 million investment loss incurred after the collapse of Sam Bankman-Fried’s FTX.

It seems the wealth manager has started taking accountability for the reputational damage following the investment loss. On May 29, as per an official press release, Temasek chairman Lim Boon Heng said  that an independent finding revealed that there was “no misconduct” internally, it was reported that both its investment team and senior management took “collective accountability,” and had their compensation reduced. He added the company felt letdown with the outcome of the investment, as well as the negative impact on its reputation, without disclosing the amount of compensation cut.

When Did The Problem Start For Temasek?

However, Boom Heng added the company has learned its fair share of lessons from the incident such as strengthening the approach to reviewing the governance, management, and controls of a portfolio company, emphasizing that it will continue to invest in early-stage companies despite the “inherent risks,” associated with any investment. The chairman noted,

“While there are inherent risks whenever we invest, we believe that we have to invest in new sectors and emerging technologies to understand how these areas may impact the business and financial models of our existing portfolio, and whether they would be drivers of future value in an ever-changing world. This is why we invest in some early-stage companies.”

The move comes after the Singapore state-owned investment firm wrote off all of its $275 million investment in FTX group last year. Temasek had invested $275 million in FTX and FTX U.S. and wrote off all of its investments to zero after Sam Bankman-Fried’s crypto group filed for bankruptcy in November. Temasek had taken a 1% stake in FTX International and a 1.5% stake in FTX U.S. as part of its investments.

When Did The Problem Start For Temasek? FTX was the cause

FTX Exec Pleads Guilty

The liquidation of Bahamas-based cryptocurrency exchange FTX began in November 2022, wreaking havoc in the crypto industry. Digital tokens including Bitcoin (BTC) and Ethereum (ETH) plunged to unexpected lows, dragging the crypto market below a $1 trillion valuation. Prominent crypto companies reeled under severe liquidity crunch announcing bankruptcies and mass layoffs.

Recently, Nishad Singh, the former director of engineering at the bankrupt exchange pleaded guilty to a number of criminal charges, including wire fraud, conspiracy to commit wire fraud on FTX customers, conspiracy to commit money laundering, and conspiracy to defraud the U.S. by violating campaign finance laws.