Download the Temasek Review (PDF 4 MB)

Wealth Added FrameworkThe objective of creating sustainable wealth for our shareholderdrives our investment strategy, capital allocation, performancemeasurement and incentive framework.We measure our performance against a hurdle rate that takes into accountthe capital we use and the risks we take in our investments.This measure of performance, which we call Wealth Added (WA), will onlybe positive if our returns exceed the risk-adjusted cost of capital.We use the same measure to guide our investment strategy and capitalallocation. For each investment, we evaluate and track its returns against itsrisk-adjusted hurdle rate. Investments in riskier sectors or riskier countrieswill have higher risk-adjusted hurdle rates.This same measure is used to drive our incentive system. Our staff share inthe WA results. When we deliver a positive WA, we have a positive bonuspool to distribute. When WA is negative, the resulting negative bonus poolleads to a clawback of deferred bonuses from prior years.Creating Sustainable Wealth for our ShareholderInvestmentStrategyIncentiveFrameworkWealth AddedCreating SustainableWealth for ourShareholderCapitalAllocationPerformanceManagement36 Temasek Review 2011