Move to review directors’ salaries signals institutional reform agenda and rejuvenation for GLCs
By MARK RAO / Graphic By TMR
Several government-linked companies’ (GLCs) management and board members enjoyed whopping salary increases with some key personnel rewarded up to a 65% jump in income last year.
Interest about GLCs’ remunerations came into light following claims that the heads and board members of these entities are paid lucratively.
The government had also sounded alarm bells and said it would review the salaries at these companies to ensure fairness and represent the performance.
“It is not only the review of directors’ remunerations, but the concept of what new blood may be able to do with these GLCs — take them to greater heights for instance,” a market analyst told The Malaysian Reserve (TMR) under condition of anonymity.
“This goes beyond just remuneration and should be seen as a change in corporate culture and governance,” said the analyst.
Rakuten Trade Sdn Bhd VP for research Vincent Lau said the move to review directors’ remuneration is good as it signals an institutional reform agenda and rejuvenation for the affected companies.
“This will also translate into efficiency and cost savings, which in turn will improve the bottom line of these GLCs,” Lau told TMR.
A check of some GLCs’ annual report showed varying rates of increase in remuneration last year.
Malayan Banking Bhd’s (Maybank) annual report showed its group president and CEO Datuk Abdul Farid Alias earned RM10.11 million in gross income last year, a 64.9% increase from the RM6.13 million earned in 2016.
Abdul Farid’s remuneration included a RM4.3 million bonus payout, besides a RM2.4 million annual salary or a RM200,000 monthly salary.
Maybank chairman Datuk Mohaiyani Shamsudin was paid RM1.04 million in that same year following her appointment in April 1, according to the annual report.
Maybank posted record net profit last, breaching the RM7 billion level. Maybank is majority owned by Permodalan Nasional Bhd (PNB).
CIMB Group Holdings Bhd chairman Datuk Seri Mohamed Nazir Razak was paid RM1.76 million, while its group CEO and ED Tengku Datuk Seri Zafrul Tengku Abdul Aziz earned RM9.88 million last year, including benefits, a 29.5% jump compared to a year ago.
Malaysia’s second-largest financial institution based on asset is 27.37% owned by Khazanah Nasional Bhd.
Datuk Seri Mohammed Shazalli Ramly, who recently resigned from Telekom Malaysia Bhd (TM) as MD and group CEO, was paid RM2.45 million last year. He only joined TM on May 1, 2017, putting his average gross monthly income at RM306,250.
TM chairman Tan Sri Dr Sulaiman Mahbob received RM690,935 in remuneration, according to the company’s annual report. Khazanah owns 26.21% of the company.
UMW Holdings Bhd president and group CEO Badrul Feisal Abdul Rahim was paid RM2.12 million in gross income for financial year 2017 (FY17), a 23.25% increase compared to FY16’s RM1.72 million remuneration.
Sime Darby Bhd (prior to the demerger into three separate listed companies) reported that chairman Tan Sri Abdul Ghani Othman earned RM1.03 million, while its president, group CEO and ED Tan Sri Mohd Bakke Salleh’s gross income was RM7.86 million.
UMW and Sime Darby are PNB-controlled companies.
TH Plantations Bhd paid its CEO and ED Datuk Seri Zainal Azwar Zainal Aminuddin RM2.14 million in FY17 compared to RM1.62 million in FY16, while its chairman Tan Sri Ab Aziz Kasim earned RM199,000.
Boustead Holdings Bhd, which is 59.06% held by the Armed Forces Fund Board, paid its group MD and ED Tan Sri Lodin Wok Kamaruddin and fellow ED Datuk Seri Ghazali Mohd Ali RM4.48 million and RM2.16 million respectively for FY17.