The pandemic has forced several other companies to take similar measures due to uncertainty in the economy
by ASILA JALIL/ pic by TMR FILE
SAPURA Energy Bhd announced that its management team will take a 50% cut in salaries with immediate effect as part of the measure to mitigate the impact of Covid-19 pandemic and low oil prices.
In a note to employees yesterday, Group CEO Tan Sri Shahril Shamsuddin (picture) stated it is imperative that the company’s management team to “take the hit” as much as they can to protect those most vulnerable in the ranks.
“We will still need to make several difficult decisions to improve our cost structure including readjusting employee salaries between 5% and 45% across the board effective after Ramadhan and reducing our workforce.
“In principle, we will ensure those with lower income are less burdened by these cuts,” he said.
Shahril added that a lot of work has been done to strengthen the company including growing the top line and improving efficiencies in operations, but the Covid-19 pandemic and low oil prices have affected the company’s financial strength.
“To sustain our business, we need to implement immediate austerity measures to preserve our cashflow,” he said.
He added that the management has built an agile strategy to navigate the company out of the storm and the plans will be shared next week.
Based on Sapura Energy’s annual report for the year 2019, the remuneration for the EDs of the group totalled to RM13.03 million and this includes salaries and other emoluments (RM8.51 million), bonus (RM4.16 million) and RM356,000 (benefits-in-kind).
Shahril took home some RM7 million in salary and emoluments last year according to the report.
The pandemic has forced several other companies to also take similar measures due to uncertainty in the economy.
Last week, Genting Malaysia Bhd confirmed on its maiden pay cut exercise as the virus forces its casinos, resorts and entertainment theme parks to be temporarily shut.
Genting Malaysia and Resorts World Bhd public relations and communications VP Katherine Chew said the pay cut only applies to certain positions employed under the Malaysian branch of the company.
The same has transpired at Tan Chong Motor Holdings Bhd. Based on news reports, Tan Chong independent directors have offered to reduce their fees, while salary cuts between 20% and 30% will take place among the senior management employees.
Non-senior management employees will face salary cuts between 3% and 15% based on their total monthly basic salary, including monthly fixed allowance.