2010 New Participants Total 68 new participants from various industries

x Financial Services - Non Banking 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Ascendas Land (Singapore) Pte., Ltd. Cathay Life Insurance (Vietnam) Ltd. Chartis Vietnam Insurance Company Ltd. Grant Thornton (Vietnam) Ltd. Indochina Capital Keppel Land International Ltd. Manulife Vietnam Ltd. Mapletree Investments Pte., Ltd. PricewaterhouseCoopers Prudential Finance Saigon Asset Management Corp. Toyota Financial Services Vietnam Co., Ltd. Vietfund Management Visa International 1 2 3 4 5 6 7 8 9 10 11 x Hi-Tech Advanced Micro Devices Far East Ltd. - Vietnam Autodesk Dell Asia Pacific Sdn - Vietnam R.O. EMC Computer Systems (FE) Ltd. Emerson Network Power Fuji Xerox Asia Pacific Pte., Ltd. Harvey Nash Invensys Process Systems (S) Pte. Ltd. Novellus Vietnam Ltd. Rockwell Automation SEA Pte. Ltd. (Vietnam R.O.) Sita

Mercer

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2010 New Participants Total 68 new participants from various industries

x 1 2 3 4 5 6 7 8 x 1 2 3 4 5 6 7 Various Manufacturing AB Mauri Vietnam Cargill Vietnam Ltd. Chantelle Vietnam Ltd. Doosan Heavy Industries Vietnam Co., Ltd. DSM Nutritional Products Vietnam Ltd. GreenFeed (Vietnam) Co., Ltd. Holcim Vietnam Ltd. Samsung Vina Electronics Co., Ltd. Chemicals Chevron Lubricant Vietnam Ltd. Henkel Vietnam Jebsen & Jessen (SEA) Pte., Ltd. Map Pacific Vietnam Co., Ltd. TOA Paint (Vietnam) Co., Ltd. Total Gas Vietnam Total Vietnam x 1 2 3 4 5 Pharmaceuticals Beaufour Ipsen Pharma Fresenius Kabi Asia Pacific Ltd. Getz Pharma Mega Lifesciences Ranbaxy Laboratories Ltd. x 1 2 3 4 5 Consumer Goods Estee Lauder R.O. Henkel Consumer Vietnam Herbalife International of America Moet Hennessy Vietnam Importation Co., Ltd. Richfield Worldwide J.S.C.

Mercer

TalentNet

32

2010 New Participants Total 68 new participants from various industries

x 1 2 3 4 5 x 1 2 3 x 1 Trading Areva T&D Vietnam Co., Ltd. DKSH Vietnam Co., Ltd. Draeger Medical Vietnam Co., Ltd. Paccess Seco Tools Financial Services - Banking BNP Paribas Hong Leong Bank Wells Fargo Bank Oil & Mining Petronas R.O. x 1 2 3 4 5 6 7 8 9 Other Industries ACNielsen Vietnam Ltd. ALSTOM Holdings Big C Vietnam Expeditors (E.I. Freight Forwarding Co., Ltd.) Federal Express Pacific Inc. R.O. Ingersoll Rand - R.O. Linfox Logistics Vietnam Sealed Air Corp. TNT - Vietrans Express Worldwide (Vietnam) Ltd.

Mercer

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33

Survey Demographics Organizations by company size

Revenue (USD in millions) Total Employees

9%

1% 7%

8%

13% 13% 51% 47%

26% 25%

< 25

25 to < 100

100 to < 250

250 to < 1000

>1000

< 100

100 to <250

250 to < 500

500 to <1000

>1000

Mercer

TalentNet

34

Key Findings on 2010 VN TRS

Mercer

TalentNet

35

Vietnam 2010 Overview

With a young population (56% under 30) and low labour cost (2nd lowest labour cost country after India), Vietnam is an attractive country for FDI Business conditions in Vietnam have been improving well compared to last year, consumer confidence re-gains and is ranked number two top confident country according to 2010 Nielsen consumer confidence index Leaders show high growth expectations towards the Vietnam economy and their own business With better growth and more investment, more competition is expected Top concerns of senior leaders are competitive pressure, ability to pass on price increase and inflation, shortage of skilled labour, petrol prices and wages growth In uncertain times, more information would give more confidence, and being consistent with peers would give more comfort

Mercer

TalentNet

36

Average Salary Increase Trend Upward trend in light of economic recovery

14.3% 12.6% 11.6% 12.6% 11.3% 10.4% 14.2% 12.2% 12.4% 12.3%

8.2%

8.5% 6.2% 5.3% 6.5%

2006

2007 GDP Growth

2008 Inc Salary Freeze

2009

2010 (Estimated)

Exc Salary Freeze

Mercer

TalentNet

37

Average Salary Increase Trend Except 2008, salary increases have been higher than inflation rates

14.3% 11.6% 11.3% 12.6% 14.2% 12.6% 12.6% 6.6% 23.1% 10.4% 10.0% 6.9% 12.2% 12.4% 12.3%

2006 Inflation

2007

2008 Inc Salary Freeze

2009

2010 (Estimated)

Exc Salary Freeze

Mercer

TalentNet

38

Salary Increase Trend by Staff Category Slightly higher than 2009 for most levels
Average Salary Increase, 2007 - 2010
16% 14% 12% 10% 8% 6% 4% 2% 0%
Executive 2007 2008 2009 2010 (Estimated) 13.8% 15.4% 12.5% 12.2% Management Prof. - Sales 13.5% 15.3% 12.3% 12.9% 13.5% 13.7% 12.1% 12.6% Prof. - Non Sales 12.8% 14.7% 12.6% 12.6% Para Prof. 11.7% 14.1% 12.5% 12.9% Blue Collar 11.1% 14.8% 12.9% 12.8% Overall 12.6% 14.3% 12.2% 12.4%

Excluding Salary Freeze Mercer TalentNet 39

Average Salary Increase Trend by Industry Upward trend for most industries except COG, Pharma and O&M industries
18% 16% 14% 12% 10% 8% 6%
All Industries Banking Chemicals Con. Goods Hi-Tech Manufacturing Pharma Oil & Gas 2006 11.6% 17.3% 11.0% 12.1% 8.5% 11.3% 10.1% 14.0% 2007 12.6% 14.6% 12.0% 12.0% 10.1% 12.5% 12.8% 13.9% 2008 14.3% 15.5% 14.2% 14.0% 10.9% 16.7% 14.0% 13.9% 2009 12.2% 12.6% 13.2% 12.7% 9.9% 11.8% 14.0% 12.4% 2010 (Estimated) 12.4% 13.9% 13.9% 11.7% 11.4% 13.4% 13.5% 11.7%
Excluding Salary Freeze Mercer TalentNet 40

2010 Average Salary Increase by Industry Only 2 companies reported salary freeze

13.9%

13.9%

13.5%

13.4% 12.3% 12.2% 11.7% 11.7% 11.4% 10.5%

12.4% 12.3%

Chemical

FSBanking

Phama

Manuf

Trading

FS-Non Bank

Con. Goods

Oil & Mining

Hi-Tech

All Ind

Incl Salary Freeze

Excl Salary Freeze

Mercer

TalentNet

41

Market Movement - Annual Base Salary (COMP1) Moderate movement for Comp1
Median trendline movement, 2009 - 2010
3,000,000 2,700,000 2,400,000

Jul-09

Jun-10

9%
Management 14%

Executive 18%

VND in Thousands

2,100,000 1,800,000 1,500,000 1,200,000 900,000 600,000 300,000 0 41 42 43 44 45 46 47 48 49 50 51 52 53

Professional 9% Para Professional 2%

54

55

56

57

58

59

60

Position Class

Mercer

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42

Market Movement - Annual Guaranteed Cash (COMP2) Moderate movement for Comp2
Median trendline movement, 2009 - 2010
3,000,000 2,700,000 2,400,000

Jul-09

Jun-10

9%
Management 13%

Executive 17%

VND in Thousands

2,100,000 1,800,000 1,500,000 1,200,000 900,000 600,000 300,000 0 41 42 43 44 45 46 47 48 49 50 51 52 53

Professional 8% Para Professional 2%

54

55

56

57

58

59

60

Position Class

Mercer

TalentNet

43

Market Movement - Annual Total Cash (COMP3) Moderate movement for Comp3 actual
Median trendline movement, 2009 - 2010
3,000,000 2,700,000 2,400,000

Jul-09

Jun-10

10%
Management 16%

Executive 21%

VND in Thousands

2,100,000 1,800,000 1,500,000 1,200,000 900,000 600,000 300,000 0 41 42 43 44 45 46 47 48 49 50 51 52 53

Professional 9% Para Professional 2%

54

55

56

57

58

59

60

Position Class

Mercer

TalentNet

44

Market Movement by Industry

Industry Manufacturing Oil & Mining Trading Pharma Hi-Tech Consumer Goods Chemical FS - Banking

Annual Guaranteed Cash 16% 12% 10% 9% 8% 8% 7% 5%

Annual Total Cash 20% 15% 7% 7% 10% 11% 5% 8%

Mercer

TalentNet

45

Pay Difference by Industry Oil & Mining pays premium in the market
Percentage Deviation from All Industries (Annual Guaranteed Cash) Percentage Deviation from All Industries (Annual Total Cash)

87% 12% 9% 7% 6% 1% 1% -8% -18% -19% -1% -9% -5% 0% 3% 18% 11%

84%

Manufacturing
-1 8 % -8 % 1 % 1 % 67 %9 % % 1 2 %

Consumer Goods
8 7 %

Trading FS - Non Banking Oil & Mining

TalentNet 46

Chemical Pharma
Mercer

Hi-Tech FS - Banking

Pay Difference by Industry - Management Level Oil & Mining and Banking pay premium in the market
Percentage Deviation from All Industries (Annual Guaranteed Cash) Percentage Deviation from All Industries (Annual Total Cash)

34% 15% 5% 3% -17% -7% -4% -11% -28% -31% -15% -28% -9% -4% -2% 3%

34% 33%

Manufacturing
-1 8 % -8 % 1 % 1 % 67 %9 % % 1 2 %

Consumer Goods
8 7 %

Trading FS - Non Banking Oil & Mining

TalentNet 47

Chemical Pharma
Mercer

Hi-Tech FS - Banking

Pay Difference by Industry - Professional Level Oil & Mining pays premium in the market
Percentage Deviation from All Industries (Annual Guaranteed Cash) Percentage Deviation from All Industries (Annual Total Cash)

87% 11% 9% 7% 7% -1% 0% -8% -19% -10% -21% -4% -2% -1% 3% 11% 10%

84%

Manufacturing
-1 8 % -8 % 1 % 1 % 67 %9 % % 1 2 %

Consumer Goods
8 7 %

Trading FS - Non Banking Oil & Mining

TalentNet 48

Chemical Pharma
Mercer

Hi-Tech FS - Banking

Pay Difference by Industry - Para Professional Level Oil & Mining pays premium in the market
Percentage Deviation from All Industries (Annual Guaranteed Cash) Percentage Deviation from All Industries (Annual Total Cash)

158% 8% 14% 13% 33% 8% 5% -4% -8% -2% -6% 9% 1% 9% 24% -6% 20%

152%

Manufacturing
-1 8 % -8 % 1 % 1 % 67 %9 % % 1 2 %

Consumer Goods
8 7 %

Trading FS - Non Banking Oil & Mining

TalentNet 49

Chemical Pharma
Mercer

Hi-Tech FS - Banking

Functional Comparison - Management Level Functional pay differences under market pressure
Percentage Deviation from All Industries

Annual Guaranteed Cash

13% 12% 8% 4%

Annual Total Cash

-1% -6%

-3% -7%

-6% -7%

-8% -12% -14% -17% -18% -22% Contact Centre

-23% -29% Prod

Eng

Corp. Affairs

Mkt

Fin

Sales

HR

Supply

Mercer

TalentNet

50

Functional Comparison - Management Level Functional pay differences under market pressure
Percentage Deviation from All Industries

Annual Guaranteed Cash

13% 12% 8% 4%

Annual Total Cash

-1% -6%

-3% -7%

-6% -7%

-8% -12% -14% -17% -18% -22% Contact Centre

-23% -29% Prod

Eng

Corp. Affairs

Mkt

Fin

Sales

HR

Supply

Mercer

TalentNet

50

Functional Comparison - Professional Level Functional pay differences under market pressure
Percentage Deviation from All Industries

19%

Annual Guaranteed Cash

17%

Annual Total Cash

4%

1% -1% -3% -1% -3% -8% -1% -6% -9% -7% -13% -17% -15% -19% -16% -21% Quality

-4%

Eng

Corp. Affairs

Fin

Mkt

HR

Supply

Sales

Contact Centre

Prod

Mercer

TalentNet

51

Functional Comparison - Para Professional Level Functional pay differences under market pressure
Percentage Deviation from All Industries
30% 28% 27% 23% 19% 11% 7% 4% 4% 1% 3% -1% 6%

Annual Guaranteed Cash

Annual Total Cash

-3%

-3%

-3% -4% -8% -10% -9% -11% -13%

Admin

Eng

IT

Supply

Fin

HR

Mkt

Prod

Contact Centre

Sales

Quality

Mercer

TalentNet

52

Location Comparison
Percentage Deviation from All Industries (Annual Guaranteed Cash)

HCMC

Hanoi

Others

6%

3%

3% 3%

2%

-0.4% -3%

-6%
-9%
Management Professional Para Professional

Mercer

TalentNet

53

Pay Progression by Career Stream and Level

Exe - Sub-Function Head Mgt - Sr Manager Mgt - Manager Mgt - Team Leader (Prof) Mgt - Team Leader (Para-Prof) Prof - Senior Prof - Experienced Prof - Entry Para-Prof - Senior Para-Prof - Experienced Para-Prof - Entry 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000

VND in thousands

Mercer

TalentNet

54

Fixed Allowances Provided by Companies

Transport Allow
% of Companies providing Typical Monthly Amount (VND 000) 50% Exec: 3,000 Mgt Sales: 1,200 Mgt Non Sales: 1,000 Prof Sales: 800 Prof Non Sales: 400 Para Prof: 200 Pharma Trading COG

Meal Allow
32% 390

Position Allow
25% Exec: 6,400 Mgt Sales: 3,000 Mgt Non Sales: 2,000 Prof Sales: 500 Prof Non Sales: 1,100 Para Prof: 400 Oil & Mining Manuf COG Chemicals

Clothing Allow
15% 100

Car Allow
13% Exec: 17,800 Mgt: 15,000 Prof: 8,000

Commonly Provided in industry

COG Oil & Mining Chemicals Pharma

Oil & Mining FS - Non Banking Pharma

COG Hi-Tech FS - Banking

Mercer

TalentNet

55

Variable Pay by Staff Category Actual bonus 2009 was slightly higher than planned, lower than 2010

32%

31% 27% 25% 29% 27%

% of Annual Base Salary

24%
20%

23%

24% 23% 19% 18% 16% 15% 15% 14% 17% 16% 13% 14%14%14% 19% 18% 20%

16%

8%

0% Executive Mgt - Sales Mgt - Non Sales Prof. - Sales Prof. - Non Sales Para Prof. Blue Collar Overall

2009 (Planned)

2009 (Actual)

2010 (Estimated)

Mercer

TalentNet

56

Variable Pay by Industry 2010 is similar to 2009 for most industries

32%

% of Annual Base Salary

28% 24% 20% 16% 12% 8% 4% 0%

19%

18%

19%

20%

2007 14.7% 20.3% 18.5% 17.4% 17.7% 28.1% 26.1% 18.9%

2008 14.6% 21.3% 17.0% 16.2% 16.4% 24.8% 27.4% 18.2%

2009 15.7% 17.0% 19.4% 19.2% 16.3% 22.5% 25.7% 19.3%

2010 (Estimated) 15.9% 17.0% 17.9% 17.8% 19.3% 22.6% 27.1% 19.9%

Manuf Oil & Gas Chemical Con. Goods Trading Banking Pharma Overall

Mercer

TalentNet

57

Variable Bonus Policy

Higher variable bonus is also planned for 2010

On-Target Performance
30%

Outstanding Performance
29% 25% 23% 21% 24% 22% 21% 21% 20% 20%

27% 25%

25%

% of Annual Base Salary

20%

18% 16%

18% 15%

15%

16% 15% 14% 14% 14% 14% 13% 13%

10%

5%

0% Mgt Sales Mgt Non Sales Prof Sales Prof Non Sales Para Prof White Collar Para Prof Blue Collar
Mgt Sales Mgt Non Sales Prof Sales Prof Non Sales Para Prof White Collar Para Prof Blue Collar

2009

2010

Mercer

TalentNet

58

Sales Incentives Policy Higher sales incentives is planned for 2010

On-Target Performance
70% 60%

Outstanding Performance
59%

58% 55% 51% 44%

33% 29% 38% 37% 38%

% of Annual Base Salary

50% 40% 30% 20% 10% 0%

31%
20%

Mgt - Sales Prof - Sales

Para Prof Sales

Mgt - Sales Prof - Sales

Para Prof Sales

2009

2010

Mercer

TalentNet

59

Variable Pay Target for 2010 Provided by Companies

Exec Type of Variable Pay % of Companies providing Number of Months Paid % of Companies providing Number of Months Paid

Mgt Sales

Mgt Non Sales 97% 2.0

Prof Sales

Prof Non Sales 95% 1.6

Para White Collar 87% 1.5 21% 3.3

Para Blue Collar 87% 1.7

Variable Bonus

96% 2.6 3% 3.3

66% 2.2 59% 3.6

53% 2.0 72% 4.0

Sales Incentives

Mercer

TalentNet

60

Other Compensation Trend Moving from Net to Gross pay structure

2008
Gross 82%

2009
Gross 93%

2010

Gross 96%

Net 15%

Net 6%

Net 4%

Mercer

TalentNet

61

Other Compensation Trend Moving from USD to VND pay guarantee

2008

2009

2010

USD 36% VND 64% VND 67%

USD 33% VND 73%

USD 27%

Mercer

TalentNet

62

Other Compensation Trend Number of months paid

2008

2009

2010

6%

6%

10%

7%

5%

14%

5%

4%

15%

78%

74%

76%

12 months
7 8 % 1 0% 6 %

13 months Others

14 months

Mercer

TalentNet

63

Staff Turnover by Staff Category Professional level still got the highest rate
Average Staff Turnover, 2007 - 2009
21% 18% 15% 12% 9% 6% 3% 0%

Executive 2007 2008 2009 7.7% 5.6% 4.7%

Management 15.4% 12.7% 11.0%

Prof - Sales 18.1% 21.0% 17.2%

Prof - Non Sales 17.1% 16.2% 12.2%

Para Prof 15.0% 10.7% 10.2%

Blue Collar 11.5% 11.7% 12.3%

Mercer

TalentNet

64

Staff Turnover by Industry Manufacturing had highest voluntary staff turnover in 2009
Average Staff Turnover, 2007 - 2009
21% 18% 15% 12% 9% 6% 3% 0%
2009 All Industries

Manuf 2007 2008 2009 17% 16% 17%

Pharma 21% 19% 16%

Hi-Tech 11% 15% 15%

FS-Non Banking 19% 16% 15%

CG 18% 19% 14%

Trading 11% 14% 14%

FS Chemical Banking 17% 16% 11% 12% 16% 8%

Oil & Mining 9% 10% 6%

Mercer

TalentNet

65

Staff Turnover Trend Downward trend after several years in upward trend
Average Staff Turnover, 2005 - 2009
20%

impacted by the economic downturn in 2009

15.6%
15%

16.4% 13.3%

11.9%
10%

12.3%

5%

0%

2005

2006

2007

2008

2009

Mercer

TalentNet

66

Benefit Practice Development Practices remain very similar to 2009

Benefit Practices, % Company Providing
92% 91% 87% 81% 69% 66% 41% 38% 35% 35% 21% 21% 11% 8% 2009 2010

AD&D Insurance

Health Care

Travel Insurance

Car

Life Insurance

Product Discount

Loan

Mercer

TalentNet

67

2010 Typical Benefits Practice (On Top Of Statutory Requirement)

Item AD&D Insurance Private Health Insurance Travel Insurance Car Life Insurance Product Discount Loan

% Co. providing Top Mgt 92% 87% 69% 41% 35% 21% 11%

Mgt

Prof

Staff

Dir Lab

Mercer

TalentNet

68

Private Health Care Similar to 2009, covering for dependent is more common for management
Executive Management

Employee and Employee only Dependents 38% 62%

Fully paid by employer 100%

Employee and Employee only Dependents 53% 47%

Fully paid by employer 99%

Professional Sales

Professional Non Sales

Para Professional

Employee only 69%

Employee and Dependents 31%

Fully paid by employer 100%

Employee only Employee and Dependents 66% 34%

Fully paid by employer 99%

Employee only Employee and 69% Dependents 31%

Fully paid by employer 98%

Mercer

TalentNet

69

Company Car An attractive benefit to recruit and retain talents

41% 32% 24%

43% 33% 28% 2009 2010

Company Owned Car

Leased Car

Car Allowance

2009 Total No. of respondents: 73 2010 Total No. of respondents: 101

Mercer

TalentNet

70

Key findings on 2010 TRS Summary

In light of economic recovery, only 2 companies reported salary freeze Salary increase rates in 2010 are slightly higher than 2009 for most levels and most industries Banking, Chemical, Pharma, and Manufacturing industry reported higher salary increase rate, Hi-tech industry reported the lowest salary increase rate Oil and Mining, Banking, and Pharma pay premium in the market Engineering and Corporate Affairs function get higher pay for management and professional level. For staff level, Engineering and Admin function get higher pay compared to other functions Variable pay planned for 2010 performance is higher than 2009 for sales function and quite similar to 2009 for other functions Private health insurance is provided by more companies in 2010, other benefits remain the same as in 2009 Moving from guaranteeing pay in net-USD to gross-VND is the market trend
Mercer TalentNet 71

Key Drivers for 2011 Remuneration

Mercer

TalentNet

72

Economic and Business Environment

GDP (%), 2006 - 2011

Inflation (%), 2006 - 2011

23.1%

12.6% 10.0%

8.2% 8.5% 6.2% 5.3% 6.5% 6.4%

6.6%

6.9%

8.0%

20 09 (E st im 20 at 11 ed ) (F or ec as t)

Source: General Statistics Office of Vietnam, IMA Asia May 2010 73

20 10

20 10

20 09 (E st im 20 at 11 ed ) (F or ec as t)

20 06

20 06

20 07

20 08

20 07

20 08

Mercer

TalentNet

Labor Demand in 2010 Headcount growth is planned to be higher in 2010

21.5% 16.4% 15.6% 13.3%

14.0% 11.3%

1.2%

2.5% 2.2%

Staff Retrenchment

Staff Turnover

Headcount Growth

2007
Mercer

2008

2009

2010
TalentNet 74

What is the hiring intention? More companies plan to add headcount in the next 12 months
Next 3 months
Recruit to add headcount 66%

Next 12 months
No headcount change 33% Reduce headcount 1%

Reduce headcount 1% No headcount change 25% Recruit to add headcount 74%

Mercer

TalentNet

75

Hot Jobs in 2010

Top 3 - difficulty in recruiting
Job Family Marketing Sales Sales Level Management Management Professional Actual Title Marketing Manager Sales Manager Sales Executive, Account Manager

Top 3 - difficulty in retaining

Job Family Marketing Sales Sales Level Management Management Professional Actual Title Marketing Manager Sales Manager Sales Executive, Account Manager

Mercer

TalentNet

76

Salary Increase Forecast for 2011

0-1% Higher 1% or More

1% or Less No change 0-1% Low er

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% > 1% lower Exe 0% - 1% lower Mgt Prof-Sales No change Prof-Non 0% - 1% higher Para > 1% higher Blue Collar

Mercer

TalentNet

77

2011 Forecast Salary Increase by Staff Category Salary increase forecasted for 2011 is slightly lower than 2010
Average Salary Increase, 2008 - 2011

16% 14% 12% 10% 8% 6% 4% 2% 0%

Executive 2008 2009 2010 (Estimated) 2011 (Forecast) 15.4% 12.5% 12.2% 11.9% Management Prof. - Sales 15.3% 12.3% 12.9% 12.1% 13.7% 12.1% 12.6% 12.4% Prof. - Non Sales 14.7% 12.6% 12.6% 12.2% Para Prof. 14.1% 12.5% 12.9% 12.5% Blue Collar 14.8% 12.9% 12.8% 12.2% Overall 14.3% 12.2% 12.4% 12.2%

Excluding Salary Freeze Mercer TalentNet 78

2011 Forecast Salary Increase by Industry Conservative forecast for most industries except COG and Oil & Mining
18% 16% 14% 12% 10% 8% 6%
All Industries Banking Chemicals Con. Goods Hi-Tech Manufacturing Pharma Oil & Mining 2007 12.6% 14.6% 12.0% 12.0% 10.1% 12.5% 12.8% 13.9% 2008 14.3% 15.5% 14.2% 14.0% 10.9% 16.7% 14.0% 13.9% 2009 12.2% 12.6% 13.2% 12.7% 9.9% 11.8% 14.0% 12.4% 2010 (Estimated) 12.4% 13.9% 13.9% 11.7% 11.4% 13.4% 13.5% 11.7% 2011 (Forecast) 12.2% 12.3% 12.1% 12.3% 11.5% 12.9% 13.0% 12.5%
Excluding Salary Freeze Mercer TalentNet 79

Factors That Affect Salary Increments Market Competitiveness is now one of the factors

96% 83% 73% 70% 58% 52%

26%

Individual Performance

Company Performance

Position in Salary Range

Inflation

Job Level

Market Competitiveness

Length of Service

Mercer

TalentNet

80

2011 Variable Pay Forecast by Staff Category Similar to 2009 and 2010
Average Variable Pay, 2009 - 2011
19% 20% 19% 24% 23% 25% 23% 24% 18% 18% 19% 27% 27% 16% 15% 15% 17% 16% 15% 14% 14% 19% 31% 27%

Overall

2011 (Forecast) 2010 (Estimated) 2009

Executive

Mgt - Sales

Mgt - Non Sales

Prof. - Sales

Prof. - Non Sales

Para Prof.

Blue Collar

Mercer

TalentNet

81

2011 Variable Pay Forecast by Industry

32%

% of Annual Base Salary

28% 24% 20% 16% 12% 8% 4% 0%

19%

18%

19%

20%

19%

2007 14.7% 20.3% 18.5% 17.4% 17.7% 28.1% 26.1% 18.9%

2008 14.6% 21.3% 17.0% 16.2% 16.4% 24.8% 27.4% 18.2%

2009 15.7% 17.0% 19.4% 19.2% 16.3% 22.5% 25.7% 19.3%

2010 (Estimated) 15.9% 17.0% 17.9% 17.8% 19.3% 22.6% 27.1% 19.9%

2011 (Forecast) 20.1% 17.2% 18.8% 18.2% 24.5% 26.0% 25.6% 19.3%

Manuf Oil & Gas Chemical Con. Goods Trading Banking Pharma Overall

Mercer

TalentNet

82

Cash Compensation Mix Sales forces have higher target variable pay portion than actual
Actual Comp Mix
Executives Management Sales Management - NonSales Professional - Sales Professional - NonSales Para-Professional Sales Para-Professional White Collar Para-Professional Blue Collar 67% 83% 82% 75% 80% 80% 73% 85% 12% 5% 5% 8% 4% 4% 4% 4% 21% 16% 16% 19% 11% 21% 12% 13%
61% 83% 83%

Target Comp Mix

76% 76% 80% 67% 84% 11% 7% 4% 28% 5% 5% 12% 11% 4% 4% 4% 21% 20% 16% 26% 12%

Base Salary

Guaranteed Cash

Variable Cash

Mercer

TalentNet

83

Key Drivers for 2011 Remuneration Summary In light of economic recovery, up to companies plan to add headcount to support their business activities in the next 12 months However, most companies are still very cautious and forecast a conservative salary increase rate for 2011 due to the economic uncertainty lying ahead Individual and companys performance are still the two main factors that affect salary increment decision. Market competitiveness is also a factor considered by companies 2011 overall variable pay is also conservatively forecasted to be slightly lower than 2010 Marketing and sales managerial positions are still considered to be difficult to recruit and retain by the majority of participating companies

Mercer

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How HR Should Prepare for the Future Suggested actions Prepare the workforce for better growth in 2010 Prepare for more competition in skilled labours Have better preparation to develop, recruit and retain hot jobs, especially the hot jobs in marketing and sales function Since compensation is the main factor to attract employee, benchmark with your peers to define how competitive your compensation is Know how much variable pay provided by your peers and improve your performance management system Aware of the potential high inflation rate by end of 2010 Keep up with changes on labour law and regulations to manage non compliance risks Plan your budget for the increased social insurance contribution up to 2014
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Thank You.

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Contact Information
For further information, please contact our consultants at tel: (84 8) 6 291 4188
Industry Consumer Goods Chemicals Financial Services Hi-Tech Manufacturing Oil & Mining Pharmaceuticals Trading VN TRS Leader Contact Person Ms Ngo Ngoc Thuc Doan Ms Vo Thi Thuy Diem Ms Hua Ngoc Thuy Tram Ms Do Thi Thu Phuong Ms Nguyen Thi Hong Van Ms Duong Thi Thu Huong Ms Ton Nu Diem Nguyen Ms Tran Thi Quynh Anh Ms Nguyen Hoa Ext. 604 611 605 606 601 607 603 610 600

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Legislative Updates 2010 - 2011

Presented by Nguyen Thi Thanh Huong Senior Manager, Payroll & HR Outsourcing Services

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Contents

1. Personal Income Tax Highlights in 2010 2. Changes in Minimum Wage 2010 3. Social Contribution Highlights 2010-2014 4. Claim Procedure for Un-employment Insurance 5. Draft of New Labor Law Effective from 2011

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Personal Income Tax Highlights in 2010 Income Tax Exemption (Circular 160/2009/TT-BTC)
Income
Bonuses paid in 2009 before 03/31/2010 Dividend paid in 2009 before 30/06/2010

Tax exemption
50% 100%

Business Per Diem: increased from VND 70,000/ day to VND 150,000/ day (97/2010/TT-BTC Circular) applicable from 20th August 2010

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Contents

1. Personal Income Tax Highlights in 2010 2. Changes in Minimum Wage 2010 3. Social Contribution Highlights 2010-2014 4. Claim Procedure for Un-employment Insurance 5. Draft of New Labor Law Effective from 2011

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Personal Income Tax Highlights in 2010 Income Tax Exemption (Circular 160/2009/TT-BTC)
Income
Bonuses paid in 2009 before 03/31/2010 Dividend paid in 2009 before 30/06/2010

Tax exemption
50% 100%

Business Per Diem: increased from VND 70,000/ day to VND 150,000/ day (97/2010/TT-BTC Circular) applicable from 20th August 2010

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Personal Income Tax Highlights in 2010

VAT deducted from the housing rental for foreign experts working in Vietnam (Document # 2696/TCT-CS)
Have signed a labor contract with Vietnam enterprises Have signed a labour contract and received salary and benefits from foreign enterprises No Yes

Guideline of conversion from net to gross salary (Document # 3565/TCTTNCN)

For net salary: converted net to gross salary (document # 1578/TCT-TNCN) For net salary and net benefits (utilities, medical insurance paid by employers): converted net of salary only, then plus with net benefits to calculate taxable income. For both net and gross salary from two sources: converted net into gross salary, then plus with gross salary for personal income tax calculation.
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Minimum Wages in 2010

2. LABOUR/WAGES: MINIMUM WAGES IN 2010

Area minimum salary applicable to

Area minimum salary applicable to foreign

Vietnamese entities

entities

Decree 97/2009/N-CP
Unit: VND in thousands Decree 97/2009 (from 01/01/2010) A Decree110/2008 (from 01/01/2009) B Increase % of increase C=A-B
Entity in area I Entity in area II Entity in area III Entity in area IV

Decree 98/2009/N-CP
Unit: VND in thousands
N98/2009 (from 01/01/2010) N111/2008 (from 01/01/2009) Entity in area I Entity in area II Entity in area III Entity in area IV

980

880

810

730

1,340

1,190

1,040

1,000

800 180

740 140

690 120

650 80

B C=A-B

1,200 140

1,080 110

950 90 9.47%

920 80 8.70%

Increase % of increase

D=C/B 22.50% 18.92% 17.39% 12.31%

D=C/B 11.67% 10.19%

Source: TalentNet summary and analysis

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Changes in Insurance Contribution Rates

Change on cap salary to contribute insurance from 01-May-2010 (Decree 28/2010/N-CP)
Unit: VND

Effective Date 1st May 2010 1st May 2009

Common Minimum Salary 730,000/month 650,000/month

Capped salary for insurance contribution 14,600,000/month 13,000,000/month

Change on insurance contribution rate from 01-Jan-2010 (Decree 62/2009/N-CP)

Kinds of comp Ins. ER EE Total 2009 SI 15% 5% 20% HI 2% 1% 3% UI 1% 1% 2% Total 18% 7% 25%

2010 SI 16% 6% 22% HI 3% 1.5% 4.5% UI 1% 1% 2% Total 20% 8.5% 28.5%

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Changes in Insurance Contribution Rates

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Contribution 2011-2014
Social Insurance: route of contribution (Social insurance law 71/2006/QH11) Social Insurance Contribution Rate 2010 - 2011 2012 - 2013 2014

Route Employer Employee Total

16% 6% 22%

17% 7% 24%

18% 8% 26%

Health insurance: maximum rate will be increased to 6%, in which employee portion is 2% and employer portion is 4%. No detail plan yet. (Heath insurance law 25/2008/QH12)

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Administrative Fines Related to Social Insurance Contribution

Fines for employers: Decree 86/21010/N-CP effective from 1st Oct 2010

Acts of violation
Delinquent contribution of SI and UI Inadequate number of people eligible to participate in social insurance SI and UI contribution not properly calculated as regulated No participation in social insurance, un-employment insurance after 30 days of signing the labor contract No payment of insurance claims to employees (sickness, maternity) Late payment to employee the reimbursement of sickness, maternity..claims after 3 days from receiving full regulated documents Not return SI book on time when employees stop working Lose, damage, make correction to the SI books

Penalties
0.05%/ day Max VND 30 million 0.3 - 2.5 million/ EE 0.3 - 0.7 Million/ EE 0.3 - 0.7 Million/ EE 1.5 - 2 Million/ EE Warning 0.2 - 0.5 Million/ EE Warning 0.5 - 1 Million/ EE Warning 0.1 - 0.2 Million/ EE
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Unemployment Insurance: Claim Procedure

Conditions for unemployment claim
UI contribution from 12 months and above Legal termination of labor contract or lost job Un-employed

Documents need to be submit

Application form Termination letter Social insurance book ID card or resident book (notarized copy)

Process to receive the unemployment insurance

Empl oyee

Un-employed/

Within 7 days

Inform to TTGTVL

Within 15 days

Submit documents

Received UI

E mpl oyer

Issue termination letter

Within 7 days

Deliver the termination letter to EE

Within 15 days

Close & return social Insurance book

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Draft of New Labour Law Effective from 1st January 2011

Regulation
Labor contract

Current labor law

Definite labor contract is signed only two times

Draft new labor law

Definite labor contract is signed only three times Labor contracts subleased between the two enterprises and agreed by the employees

Labor sublease contracts Salary during probation period Termination of labor contract Calculation time for severance allowance At least 70% of the basic salary Notification before the expired date of the labor contract is not required

At least 85% of the basic salary Within 15 days before the labor contract expired, employee must be notified Total working time up to 31/12/2008 plus the time that employee did not contribute to unemployment insurance after that

Total working time up to 31/12/2008

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Draft of New Labour Law Effective from 01/01/2011

Regulation

Current labor law

Draft new labor law

ER: Compensate 2 months salary for indefinite LB & definite LB; 1 month salary for labor contract under 12 months Add at least 2 months salary compensation if the labor contract terminate EE: compensate 1 months salary for indefinite LB & definite LB; month salary for labor contract under 12 months Not exceed 300 hrs/ year Pay 400% of salary (including the work day on holiday) Holidays: 9 days/ year Foreigners: add 2 days for their countrys national holidays

Unlawful termination of labor contract

ER: compensation of at least two months salary and allowances (if any)

EE: can not receive severance allowance and have to compensate month salary Overtime Overtime salary payment Full paid holidays Not exceed 200 hrs/ year Pay 300% of salary (including the work day on holiday) Holidays: 9 days/ year

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