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[Tempatan] Overpaid CEO GLC

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Post time 23-6-2018 09:20 AM | Show all posts |Read mode
Overpaid CEOs and social duties of GLCs set for review
    Corporate News
    Saturday, 23 Jun 2018



The new government has clearly said that there is a need to review the role of GLCs and the remuneration paid out to their top executives

A GLANCE at one of the annual reports of the country’s government-linked companies (GLCs) reveals that its chief human resource officer earned close to a million ringgit or about RM80,000 per month, last year.

Other senior personnel were also compensated with generous remuneration, with its chief executive taking home over one and the half million ringgit in financial year 2017.

More importantly, this was at a company that had courted much controversy in recent times over allegations of mismanagement and under-performance.

Such a scenario, however, is not uncommon at GLCs, where remuneration of key executives tend to run in the millions but performances sometimes leave much to be desired.

By definition, GLCs are companies where the government has a direct majority stake via their entities such as Khazanah Nasional, Employees Provident Fund, Permodalan Nasional Bhd (PNB), the Armed Forces Fund (Lembaga Tabung Angkatan Tentera) and the Pilgrims Fund (Lembaga Tabung Haji).

In recent years, remuneration of GLC chiefs, senior management and its directors have been on the uptrend following a transformation initiative to make them more competitive commercially.

The thinking behind this is that in order to attract talent – subjective as the definition of that may be – top dollar should be paid.

Some, however, argue that GLCs should in fact prioritise national service a little more.

EPF Building in Kuala Lumpur.- Art Chen / The Star.. xxxxxxxxxxxxxxxxxxxxxxx

Universiti Malaya’s Faculty of Economics and Administration professor of political economy Edmund Terence Gomez says GLCs have social obligations.

“What this essentially means is that GLCs cannot operate in a purely commercial manner as they also have to look at the social dimension,” he says. “The GLC professionals have many times articulated that they are doing national service. Going on that alone, one can argue that they shouldn’t be paid private sector salaries,” Terence adds.

And so it is now, there is a disquiet building up among GLCs following the change in government.

The new government has clearly said that there is a need to review the role of GLCs and the remuneration paid out to their top executives and senior management.

In this regard, the Pakatan Harapan government is understood to be mulling over making drastic changes in the appointment and remuneration of key directors at GLCs which include government agencies.

It was reported recently that the Council of Eminent Persons, headed by Tun Daim Zainuddin, who was Finance Minister in the 1980s, has requested details of the salaries of some of the top executives at GLCs as part of the review.

Already, there have been a couple of GLC chief executives who have left and more of this is expected to materialise over the coming weeks.

“It appears to be a purge of Tan Sri Nor Mohamed Yakcop’s boys,” quips an industry observer, referring to the veteran politician who was instrumental in the revamp and transformation of Khazanah which started in 2005 and subsequently, driving the GLC transformation initiative.

UM’s Terence says if the new government is to appoint new individuals, it must ensure that the process is transparent.

“If you are removing these people, who are you replacing them with? More importantly how are you selecting these people?

He adds there needs to be a transparent mechanism in the appointment of this new breed of professionals that will be brought in and what must also be looked into is the kind of check and balances being put in place to ensure governance.

“There should be a debate on these things,” he says.

Economist Yeah Kim Leng believes that a review is timely and appropriate as part of a deeper institutional and structural reform.

“The broad aims are firstly, to reduce excessive payoffs which don’t commensurate with performance and secondly, to address the widening wage and benefits gap between the top and bottom rungs of the organisation,” he says.

Such rationalisation will result in a more equitable salary structure as well as raise the generally depressed wages of middle management and support staff which form the largest number of most organisations, Yeah adds.

Unfair advantage

The role of a head honcho, be it at a GLC or non-GLC, is seldom a walk in the park.

CEOs make critical operational decisions that affect everything from future business directions to the health of a company’s balance sheet and employee morale.

The job generally entails long hours and tremendous pressure to meet expectations of shareholders and stakeholders.

But again, while local GLCs have been key drivers of the economy, one key feature is that they are ultimately owned by the government.

This, some argue, give GLCs unfair advantages such as access to cheap funding and political patronage over their private counterparts.

So, is running a GLC more of a stewardship role as opposed to an entrepreneurship role?

Therein lies the issue that in turn will have a bearing on the remuneration levels of GLC heads.

Minority Shareholders Watch Group (MSWG) chief executive office Devanesan Evanson puts it this way.

“Entrepreneurs have their skin in the game in that there are often the major or substantial shareholder in a company.

“It is in their direct interest to perform as this will be translated into share price appreciation which will impact the value of their shareholdings – this is motivation to grow the entrepreneurial spirit,” he says.

On the other hand, GLC heads do not have their skin in the game save for their limited shareholding through ESOS or share grant schemes.

“If a GLC loses money, the impact on them is limited. They may be prepared to take perverse risks as the eventual loser is the government-linked investment companies or GLICs (and the minority shareholders of the GLC), which eventually are the people who are the members or subscribers of the GLICs.

“In that way, we are not comparing apple to apple and yet, we need talent to run GLCs.

“So we can conclude that, we need to pay for talent at GLCs but it should not be as much compared to what one would pay the CEO of a firm which he started,” Devanesan says, noting that remuneration of some of the GLC heads have risen too fast in recent years.

Rising remuneration is a given, others say, as the government had recruited top talent from the private sector to helm these companies.

A case in point is Axiata Group Bhd , which has done relatively well with the infusion of the “entrepreneurial spirit” under the helm of president and group CEO Tan Sri Jamaludin Ibrahim, who has helmed the Khazanah-owned telco since 2008, they point out.

Prior to that, Jamaludin was with rival Maxis Communications Bhd, a private company controlled by tycoon Ananda Krishnan.

Other GLCs which have performed consistently over recent years include banks like Malayan Banking Bhd and CIMB Group Holdings Bhd which have expanded their operations out of Malaysia, carving a brand name for themselves regionally.

Under a 10-year transformation programme for GLCs initiated in 2005, companies were given quantitative and qualitative targets to meet as measured by key performance indicators.

Now, the 20 biggest GLCs currently make up about 40% of the local stock market’s market capitalisation.

One of the principles under the programme was also the national development agenda, which emphasised the principle of equal growth and development of the bumiputra community with the non-bumiputras.

Asian Strategy and Leadership Institute (ASLI) Centre of Public Policy Studies chairperson Tan Sri Ramon Navaratnam says the purpose of establishing GLCs to encourage bumiputras to participate in business has largely been fulfilled.

“Now that the bumiputras are on a strong footing in the corporate sector with able leaders who have wide experience, it (GLCs) could be seen as an erosion to the welfare and progress of the smaller and medium-sized industries, particularly those where other bumiputras are involved,” Ramon says.

Having said that, he says although many GLCs are doing well, they have performed well “mainly because of protective policies and monopolistic practices”.

“The time has come in this new Malaysian era for more competition and less protection.”

Benchmarking

Still, if simplistic comparisons are to be made, the CEOs of the country’s two largest GLC banks, Maybank and CIMB for instance, took home less than the CEO of the country’s third largest bank, the non-GLC Public Bank Bhd last year.

In 2017, Public Bank’s managing director Tan Sri Tay Ah Lek took home some RM27.8mil in total remuneration while Maybank’s Datuk Abdul Farid Alias earned RM10.11mil and CIMB’s Tengku Zafrul Abdul Aziz made RM9.86mil.

Across the causeway, a survey of CEO remuneration of Singapore-listed companies by one financial portal shows that Singaporean GLC CEOs earned 31% more than their non-GLC counterparts in 2017.

Singapore’s Temasek Holdings-owned DBS Bank, which is Singapore’s largest bank, paid out S$10.3mil (RM30.36mil) to its head honcho, while in the telecommunication sector, SingTel’s remuneration to its top executive was some S$6.56mil (RM19.34mil) for the most recently concluded financial year.

By definition, Singapore GLCs are those which are 15% or more owned by the city-state’s investment arm Temasek Holdings.

UM’s Terence does not think Singapore should be a benchmark for Malaysian companies.

“Singapore is a much smaller country and the manner in which they operate in is also different ... their GLCs are deeply conditioned by their holding company, which is the Minister of Finance Incorporated,” he says.

MSWG’s Devanesan notes that determining remuneration is “not exactly science” as there are many parameters to be considered.

Some of the factors to note include whether the companies are in a monopolistic or near monopolistic position and the performance of the GLC heads over the years.

“Based on these parameters, we can instinctively know if a GLC head is over-remunerated,” he says. Over in China, state-owned Industrial and Commercial Bank of China (ICBC), the country’s largest lender by assets, paid out about 63.43 yuan or about RM39mil in total remuneration before tax for the year 2017 to its top executive.

Notably, the Beijing-based ICBC’s net profit’s was at a whopping US$45.6bil (RM182bil) in 2017.
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Post time 24-6-2018 12:09 AM | Show all posts
If these bastards are to be kicked out from the GLC's and GLIC's .....
1. How much money can be saved by the GLC's and GLIC's?
2. Companies won't "kaput".......as there are many capable 2nd and 3rd line management who are much better than the stupid CEO/MD who are politically appointed
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Post time 24-6-2018 12:12 AM From the mobile phone | Show all posts
Gile sgt x efektif gomen dulu kawal gaji glc
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Post time 24-6-2018 12:13 AM | Show all posts
UMW Holdings suffered loss of RM651 million.........yet the CEO's salary was RM2.1 million in 2017.
What the fuck
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Post time 24-6-2018 12:14 AM From the mobile phone | Show all posts
GLC employees ni dr segi performance kerja byk ke laut. Overrated kat market
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Post time 24-6-2018 12:33 AM From the mobile phone | Show all posts
Loyalty is only to money.

Pay peanuts, expect sending performance or worst still, corruption.

A more simple solution is gomen sell the stakes la kalu 'sentap' sgt nak byr gaji.

Kalu engineer petronas ada offers to work overseas dgn package USD 30k/month, takkan gaji CEO RM 100k kot?

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Post time 24-6-2018 12:49 AM From the mobile phone | Show all posts
Edited by Dwdrum at 23-6-2018 08:52 AM

Anak bekas ceo glc pernah i kenal di murica ....mahu survive tanpa pertolongan daddy kata nya .... mummy pula selalu pujuk untuk balik malaysia kata nya buat apa jadi security guard mat salleh rumah sendiri ada security guard

Kudos pada anak bekas ceo ni .....
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Post time 24-6-2018 12:52 AM From the mobile phone | Show all posts
Dwdrum replied at 24-6-2018 12:49 AM
Anak bekas ceo glc pernah i kenal di murica ....mahu survive tanpa pertolongan daddy kata nya .... m ...

Macam drama korean sangat anak orang kaya tak nak kerja dengan mak bapak
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Post time 24-6-2018 07:04 AM From the mobile phone | Show all posts
Dwdrum replied at 24-6-2018 12:49 AM
Anak bekas ceo glc pernah i kenal di murica ....mahu survive tanpa pertolongan daddy kata nya .... m ...

Mcm kisah drama melayu aje.

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Post time 24-6-2018 07:19 AM From the mobile phone | Show all posts
Dah la tgh geram dgn tnb ni.. tgk yg tnb punye bukan main byk gajinyer. Servis tnb mcm ape je. Bil setiap bulan makin naik n naik. Ntah ape2.
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Post time 24-6-2018 07:28 AM From the mobile phone | Show all posts
Edited by adm7 at 24-6-2018 07:30 AM

Tak sangka gaji ceo petronas lagi rendah dr ceo affin, mbsb, tnb, boustead padahal net profit petronas lg byk berganda2
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Post time 24-6-2018 07:29 AM From the mobile phone | Show all posts
Apa maksud overpaid?
Kata terus terang jerla yang korang nak letak org korang sendiri dalam semua glcs tu. Takkan scheme gaji dorang nak sama dengan scheme gomen servant. Haish.
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Post time 24-6-2018 07:32 AM From the mobile phone | Show all posts
kekekek replied at 24-6-2018 07:29 AM
Apa maksud overpaid?
Kata terus terang jerla yang korang nak letak org korang sendiri dalam semua g ...

Selalunya bila kerajaan bertukar, glc pun akan bertukar tangan kepada ahli politik parti yg memerintah. Azmin pun pegang banyak jawatan dlm glc selangor. So tak heran kalau kerajaan akan ganti dengan orang-orang diorang
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 Author| Post time 24-6-2018 07:33 AM From the mobile phone | Show all posts
Gaji CEO Syabas lagi tinggi walhal apa la sgt business dia
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Post time 24-6-2018 07:50 AM | Show all posts
https://www.pkns.gov.my/en/about-pkns/board-members

So apa mau heran?
Macai pakatan selalu kritik BN letak orang-orang BN dalam BOD padahal diorang pun sama je.
Macai je bodoh berhujan panas bermatian matian sokong orang politik tapi kekal hidup melarat. Siap redha lg kena kencing.
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Post time 24-6-2018 07:54 AM | Show all posts
Sultan Selangor pun tak setuju lantik BOD dikalangan ahli politik

SHAH ALAM: Sultan Selangor Sultan Sharafuddin Idris Shah tidak setuju ahli lembaga pengarah Perbadanan Kemajuan Negeri Selangor (PKNS) dilantik dari kalangan ahli politik.

Baginda berkata ahli lembaga pengarah PKNS seharusnya seimbang dan dilantik dari kalangan mereka yang profesional.

“Mereka boleh memberi pandangan, buah fikiran, nasihat dan tunjuk ajar dalam sektor pembangunan dan hartanah,” katanya semasa merasmikan Ibu Pejabat PKNS hari ini.

Sultan Sharafuddin turut berharap PKNS terus memainkan peranannya sebagai badan korporat untuk bersaing di peringkat global di samping bertanggungjawab membantu orang Melayu di Selangor yang berpendapatan rendah.

Baginda berkata peranan berkenaan hendaklah berterusan agar orang Melayu di negeri ini tidak terlalu ketinggalan.

“Perkara ini amat penting bagi memastikan keharmonian dan perpaduan antara kaum yang ada sekarang ini akan terus dikekalkan,” katanya.

Dalam ucapannya, Sultan Sharafuddin turut merasa sedih kerana generasi baru kakitangan PKNS lupa mengenai fungsi asal penubuhan PKNS yang diasaskan oleh bekas Menteri Besar Selangor ke-8 Datuk Harun Idris.

“Ia bertujuan menolong orang Melayu berpendapatan rendah yang tinggal di Selangor untuk mendapatkan rumah yang selesa dan mampu milik.”

Sultan Sharafuddin turut percaya pengurusan PKNS kini akan kembali ke matlamat asalnya bagi meneruskan pembangunan dan kemajuan untuk rakyat Selangor.

“Dengan usaha PKNS menyediakan rumah mampu milik bagi orang Melayu berpendapatan rendah di Selangor, ia akan mengurangkan beban rakyat dan memenuhi impian mereka untuk memiliki rumah sendiri yang berkualiti pada harga yang mampu,” katanya.


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Post time 24-6-2018 07:58 AM | Show all posts
So tunggu jela diorang revamp GLC dan jangan heran kalau BOD GLC ni dipenuhi oleh orang politik dari pakatan. Masa tu tak heran kalau macai pakatan masih angguk-angguk lagi
Ahli lembaga pengarah GLC sedia ada dah patut update resume sekarang ni
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Post time 24-6-2018 08:01 AM From the mobile phone | Show all posts
Tengok sikit gaji ceo company bawah khazanah
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Post time 24-6-2018 08:02 AM From the mobile phone | Show all posts
Patut kn bg yg layak...bukan setakat nganga tak tahu mendaaa...
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Post time 24-6-2018 08:40 AM From the mobile phone | Show all posts
kekekek replied at 24-6-2018 07:29 AM
Apa maksud overpaid?
Kata terus terang jerla yang korang nak letak org korang sendiri dalam semua g ...

Btol gak, how to define overpaid tu?......kalo glc tu rugi yet dorg dpt payment yg hemsen kita bleh la kondem tp kalo glc tu untung giler2 how nk justify dakwaan kita tu?
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