An (Chief Executive) Officer and a Gentleman

Dato’ Mohd. Bakke Mohd. Salleh

After much hype post our initial reporting of the proposed resolution of the upcoming Sime Darby Extraordinary General Meeting (EGM) on 8 November, it is believed that Group President and CEO Dato’ Mohd. Bakke Mohd. Salleh yesterday submitted a memorandum to the Secretary of the Board of Directors (BOD). In the memorandum,   Bakke  stated to opt out from the LTIP and proposed Resolution 2 to be withdrawn.

The circular to the EGM made public from 16 October drew a lot of flak from cybersphere critics. That started avid readers to bring the contentious issue around social gatherings based on the published irregular BOD proposals to the shareholders at the 8 November EGM for approval.

Sime Darby EGM proposal

Along several other bloggers, we were invited to have an afternoon tea engagement with Dato’ Bakke and several his senior management on 24 October. It was six days after of our initial and only posting on the matter.The EVP for Human Resources explained in detail about the schemes in the proposal. It is about their reward scheme on performance, based on future contributions and results produced instead of the traditional reward scheme based of past performance.

In Bakke’s case, he would be entitled for the maximum allocation of 3 million shares granted to him after three years, provided all the evaluation processes of the LTIP are met and fully complied. Even that, the exercise would take ten years to be fully realised.

Apparently, the details which the EVP for Human Resources shared with us about the three proposed grants have not been made public. The strategy of the Sime Darby BOD is to get an approval for the scheme and the details would be released when the three grant schemes were to be implemented and exercised. As when it was presented to us, it is a highly technical scheme.

According to the EVP, when Sime Darby first embarked on getting the right reward scheme which will match their effort for better productivity and the same time, lucrative enough for talent retention, they looked into the grants schemes as options against the more common but various ESOS schemes as far back as 2007. The technical advisers for there three grants schemes is Towers and Watson.

Our skepticism was about the timing. It would be a point of contention at the juncture where the Opposition is throwing anything and everything in sundry on the table, to get  attention for a political mileage. So would the aspiring candidates for the Ruling party. The Malaysian political scene had never been so colourful as compared as the current electoral term.

Resolution 1 for the 8 November EGM

Resolution 2 and Resolution 3

In a Bulletin Utama TV3 report last night, the proposed grant scheme for the 8 November EGM story was a business segment item. A comment was sought from the Malaysian Minority Stockholders Watchdog Group (MSWG). The MSWG CEO said they are not disputing the grant schemes. However, she commented for the BOD to propose for Bakke’s grant scheme at this point of time is ‘premature’. MSWG also suggest that a committee be formed to monitor the transparency of the implementation of the three grant schemes.

The details of the memorandum purpoted sent to the Secretary of the BOD yesterday is still sketchy. However, its is believed that Bakke is opting out to dispel any further speculations on the subject matter be perpetuated further, which would put him, the senior management of Sime Darby and/or his family in bad light.

When contacted, senior corporate communications executive of Sime Darby told us to wait for a formal announcement on the matter on Monday.

If this story turns out to be true, Bakke should be commended for his examplry leadership of making the organization comes first instead of his own personal benefits. This decision would make him rise way above the Sime Darby BOD and his integrity as a professional manager intact. This would automatically bring about greater confidence on Bakke, on top of his success to consolidate, clean up and turn-ground the Group since appointed two and a half years ago.

Sime Darby is a conglomerate based on plantations where seven listed corporations are the Group. Over 100,000 employees served the conglomerate where unit trust schemes under PNB such as ASNB owns more than 53% holding.

Published in: on November 3, 2012 at 20:00  Comments (11)  

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11 CommentsLeave a comment

  1. I commend Dato’ Bakke for being honourable and selfless. I believe his rezeki will be there for him in time. And thank you Dato’ for proving that a Malay entrepreneur/top executive/businessmen is not all about enriching themselves. There is sense of duty, honour and country first.

    As pointed out, it is all about timing, why now? What the heck is the BoD thinking?

    One might even wonder is this a prelude/justification of sort to ‘bigger things’ – such as a ‘similar’ scheme for the BoD later?

    Heaven knows – and I was told that while Santa live in the north pole, he’d like to think that he live in heaven..

    • Yes. Dato’ Bakke is demonstrating selfless-ness. In the materialism of modern world, he has shown the true grit of being an examplry leader, which could even put some PM Najib’s cabinet ministers to great shame.

      Bakke also demonstrated that he is a bigger man than any of Sime Darby’s BoD. Look at the BoD. None of them resigned when the RM 4 billion loses when they finally hv the audecity to admit on all the scandalous projects that hv been rotting for years in the books. 2 1/2 years ago, the BoD only sacked then the CEO Zubir Murshid and appointed an interim one.

      Many of them are still around. Which incl Chairman Tun Musa Hitam, who is still offering himself for re-election in this upcoming AGM.

      He is a seasoned politician. He is supposed to be wise. He should hv provided the leadership that decisions made or proposals for schemes like these could only blow in the face of PM Najib as the nation’s CEO and custodian steward of all Malay agenda programs.

      Then again six years ago it was Musa who mind-blowingly tried to justify when Malaysians where bitching across the board about the sleepy-head and blurry PM as “Elegant Silence”.

      Do you think Musa the Fox care about the ‘Bigger Picture’?

  2. As an ASB unit trust holder, I cant accept the thought of dishing out of ‘free shares’ as performance incentives & reward schemes. However BD wants to justify it here in this posting, its still ‘free shares’. Especially to ‘selected employees’, which is only management, senior management & BoD are entitled to.

    Sime Darby Group is Govt’s effort to ‘nationalize’ British plantation plc for the realization of NEP via PNB. It’s about a noble intent of wealth distribution to the masses instead of the ‘selected few’.

    Sime Darby Group is about realizing socio-economic policy being exercised for the target group masses. BoD’s ‘free shares’ LTIP grant schemes suddenly took the Group into the feudalism practices & bourgeoise attitude.

    If BoD wants to reward Bakke & management team for a fantastic job, do so with pay & performance related bonus. Make their pay package befitting to the responsibility & commensurate the Group results. Do this instead getting some fancy Kwai Loh consultants come up with ‘ENRON-like’ schemes.

    I saw the Group Corp Comm’s reaction to the bloggers highlight on this ‘free shares’ excercise. If only Axiata & Bursa Malaysia do this, then it is still uncommon. Other plantation-based plc don’t do this.

    The most profitable Malaysian corp, Petronas, don’t do this!

    My worry is that if Sime Darby justification on these ‘free shares’ continue, then their inward-looking bourgeois trait is apparently clear. Sime Darby BoD & senior management must never forget 53% of the shareholders, are actually 9 million PNB unit trust holders. It doesn’t get more ‘rakyat diutamakan’ than that!

    • They did it in US. Sing unto themselves big fat salaries, bonus and benefits. The company called Enron. It went bust. Billions of dollars. Called the Enron debacle.

      Good that Bakke doesn’t do it. And he doesn’t have to recommend to the Board big fat bonuses foor the Chairman (who may have started the idea anyway) and the Board members. Last time we read about the watchdogs who didn’t watch. And Sime lost a huge chunk of money. As an NGO, we have a direct interest in proper watch-dogging. Or dog-watching, whichever.

      • Correction:

        As a GLC ..

  3. Bro.Giji Dato Bakke dalam Sime Darby ialah 500 ribu rgt sabulan.Gaji Dato Esmy dalam tabong Haji hanyalah 70 sabulan.Itu pun PASndah buat bising.
    Patutlah Dato Bakke tolah share option scheme,gaji diampun makan tak habis sampai anak cucu.

    • Is it true? Can verify that RM500,000 sebulan? Ada sebut dalam Audited A/c atau Laporan Tahunan ke?

      Bunyi macam Enron saja. Satu macam dah Malaysia nih. CIMB boss dapat berapa?

  4. BigDog,

    What ever the justification for the ‘free shares’, be it for ‘future instead of past performance as an incentive’ or talent retention long term program, should the BOD pay themselves or executives FIRST ahead of the shareholders?

    The shareholders put in money and take risk. Considering that the 9 million ASNB unit trust holders hv no control on what the BOD/executives do or decisions make, how do they protect themselves against the repeat of the RM4 billion aggregated losses in projects such as Bakun, Qatar and Maersk. This is not withstanding that one time Sime Darby lost a lot of money in Sime Bank.

    • 9 million ASB investors has no control over what Sime Darby does? What is PNB doing? Gigi dah tercabut ka?

      • That’s right.

        The PNB appointed literally buta kayu to represent the 9 million ASNB unit trust holders. Look how they sat in the BOD & allowed projects like Bakun, Qatar, MEQ accumulated losses in the disgusting proportions, year after year without them raising any alarm on the management.

        Shameless bunch of self serving individuals!

  5. There is no need to give free shares to keep talent. The plantation business is a low tech one. The workers are paid low salary mostly poor migrant workers.

    It is not a Google or high tech company where talent for difficult work is required. These is a mandor slave work force.

    They do nothing except eat grapes at Board meeting. If the price of palm oil goes down, they still makan the same gaji. The small holder suffer. They pay less dividend to the Malays ASB.

    BUT they still still get the same salaries.

    Who you want to cheat Bakke?

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