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 In the memorandum, Bakke stated to opt out from the LTIP and proposed Resolution 2 to be withdrawn.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.
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.
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.