Paying peanuts for pros

The new business philosophy of ‘Paying peanuts for pros’ has suddenly re-emerged with the Malaysia Baharu under Gerontocracy Prime Minister.

NST story:

KUALA LUMPUR: FGV Holdings Bhd shareholders have today shown dissatisfaction towards their board of directors’ performance when they voted to reject their pay packages.

Last year, FGV posted net losses of RM1.08 billion, dragged by falling palm oil prices as well as impairments and provisions totalling RM1.04 billion. This was on the back of RM3.23 billion revenue.

FGV chairman Datuk Wira Azhar Abdul Hamid said all directors had been re-elected but resolutions related to their pay packages had been rejected by major shareholders Federal Land Development Authority (Felda), Koperasi Permodalan Felda and Lembaga Tabung Angkatan Tentera.

Azhar said FGV board members were currently discussing the most appropriate thing to do and looking at all options available.

“I, myself, don’t know the basis for the major shareholders to reject the board of directors’ remuneration package.

“It seems that the shareholders’ message to the board of directors is ‘we want you to work but we’re not paying you’ which I think is a little bit irrational,” Azhar told reporters after a gruelling five-hour FGV shareholders’ meeting here today.

According to FGV’s 2018 annual report, its board of directors consists of Azhar, Mohd Hassan Ahmad, Datuk Dr. Othman Omar, Datuk Yusli Mohamed Yusoff, Datuk Mohamed Suffian Awang, Datuk Dr. Salmiah Ahmad, Dr. Mohamed Nazeeb P.Alithambi, Datuk Mohd Anwar Yahya, Dr. Nesadurai Kalanithi and Datin Hoi Lai Ping.

Based on FGV’s 2018 annual report, the fee payable to Azhar as chairman of the board was RM1.95 million, versus the total remuneration of RM5.74 million for the board, which consists of 10 members.

When asked if FGV directors would resign, Azhar said: “There is no immediate decision among directors, for now. We are considering all options.”

He stressed that FGV directors were responsible and professional in executing their duties.

“We consider all factors carefully to put forward plans that would ensure sustainability of FGV. But today’s vote gives the impression that our efforts for the past 18 months are not appreciated,” Azhar said, dejectedly.

To another question if FGV directors would go on working without being paid, Azhar reiterated that the board had yet to collectively decide on their next move.

“What concerns us most is the interests of the company,” he remarked.

Felda is FGV’s biggest shareholder with a 33.7 per cent stake, while KPF and LTAT own 5.25 per cent and 1.25 per cent respectively.

The rejected resolutions were specifically to approve the payment of 2018’s directors’ fees, payment of a portion of directors’ fees payable from June 26, 2019 until the next annual general meeting (AGM), and the payment of benefits payable from June 26 until the next AGM.

Shareholders also rejected the resolution for directors to allot and issue shares pursuant to Section 75 of the Companies Act, 2016.


This is not the first time the question of pay for directors and executives of civil servants and GLCs, even the listed firms, have been openly raised by the leadership.

It is presumed that the large shareholders, adhered to the wishes of their Boss.

In the recent months, Gerontocracy Prime Minister and his adviser have sounded out that professionals in strategic places should do “national service”.

Probably to be thrifty on the kitty is required in these trying times.

However, how is the Government ensuring that they are getting the best talents to serve their cause.

Civil servants and executives, including in the listed firms are mostly those who have had considerable experience and exposure.

Some, for almost half a century.

Take the BoD of Khazanah Nasional Bhd which decided to leave literally weeks after the present Government was formed.

Never mind the cold shoulder treatment they have gotten. The consolidated corporate experience the entire BoD at the time of departure is a quarter of Millenium, plus or minus a few dead years.

Perhaps Gerontocracy Prime Minister could get replacement talents for those who prefer or asked to leave.

Then again, the issue would these ‘peanuts paying pros’ be providing the best of themselves, for the ‘national service’ that they are providing.

Or they are just serving to pander the stop-gap leadership of Gerontocracy Prime Minister, who may or not be around in the mid term of the mandatory electoral period.

The rakyat did decide on the ruling party for what it was in their expectation, slightly over a year ago.

The general feeling is that they did not get a good deal for their political decision. It is believed that many of them who made the decision overpowered by sentiments, have now be quietened for the outcome that they have to face.

This AGM is also something alarming. The general public is wondering whether or not the BoD consulted the significant shareholders for their proposed resolutions, to be passed at the mandatory meeting.

Then there is also the ganging up of significant shareholders to shoot down the BoD proposal, in the open.

The Star story:

Unmasking the FGV remuneration saga

THE recent freeze on the remuneration payout of FGV Holdings Bhd (FGV) directors by its three major and substantial shareholders especially Felda – while is understandable from the perspective of financial performance – also has that tinge of irony resembling “a father/mother disciplining his/her child in public”.

At FGV’s marathon annual general meeting which lasted five hours on June 25, the Federal Land Development Authority (Felda) which is FGV’s biggest shareholder with a 33.67% stake – alongside Koperasi Permodalan Felda Malaysia Bhd (5%) and the Armed Forces Fund Board (1.25%) – had voted against three resolutions pertaining to the remuneration of FGV’s directors.

Under resolution one, FGV sought its shareholders’ approval for payment of directors’ fees amounting to RM2.55 million in respect of financial year ended Dec 31, 2018 (FY2018).

Resolution two involves payment of a portion of directors’ fees to non-executive directors up to an amount of RM1.18 million from June 26, 2019 until the company’s next AGM while resolution three sought shareholders’ approval for the payment of benefits to non-executive directors from June 26, 2019 until the company’s next AGM.

As a conduit for communication, I wonder if he had ever engaged the FGV board to raise his objection on the remuneration issue prior to the AGM.

If yes, did the FGV board provide satisfactory explanation or justification over the quantum? Assuming that the FGV board had stated its stance on the matter, shouldn’t he initiate an engagement between both the Felda and FGV boards to reach an understanding, thus resolving any impending concerns beforehand?

Otherwise, one cannot be blamed to think that the board nominee could not have chosen a better timing to drop a bombshell. This is given, it is a rarity for shareholders to re-elect the board of directors but voted against resolutions related to the directors’ remuneration.

Writing is on the wall

After all, tell-tale signs of a friction within the Felda family has become more visible to the public of late which FGV Chairman Datuk Wira Azhar Abdul Hamid has vehemently denied at the recently concluded AGM. 

Media reports have surfaced in recent times that Felda is reviewing its land lease agreement (LLA) with FGV.

In retrospect, Felda handed over the management of some 355,000ha of its plantations via a 99-year LLA to FGV as part of the latter’s flotation exercise in 2012. In return, Felda was to receive payments of RM248 million annually as leasing fee in addition to a share of profits at a quantum of 15% per annum.

However, in view of a dip in crude palm oil (CPO) prices, FGV is only able to fork out an average of RM400mil a year in contrast to Felda’s minimum requirement of RM800mil per annum to manage and ensure the well-being of land settlers.

The recent stepping down of Felda chairman Tan Sri Megat Zaharuddin Megat Mohd Nor after barely 11 months appointed to the post is perhaps a harbinger of worsening discord within the Felda family although Prime Minister Tun Dr Mahathir Mohamad has played down the resignation by pointing to “health reasons”.Back to the drawing board

Given that both communication and engagement are crucial tools to strengthen rapport with shareholders, perhaps the FGV board should in the future be more proactive in engaging with their major and substantial shareholders as well as the various institutional investors.

After all, engagement with relevant stakeholders is very crucial for better understanding of the company’s operations apart from being a perfect avenue for the company to update its performance which is very much under public scrutiny of late.

This applies to engagements at both external level and even those with internal link. A case in point was the very fact that the proxy of Koperasi Permodalan Felda Malaysia raised certain concerns which struck the mind as if the FGV Board has turned a deaf ear or not interested in addressing the grievances raised by the members of the cooperative.

Now that shareholders had voted against the remuneration package at the AGM, the only option to “unfreeze” the directors’ remuneration package is to call for an extraordinary general meeting (EGM) to seek a fresh mandate.

But this can be seen as a waste of money and resources, which can be better used to manage the array of challenges on the business front that FGV is facing.

At the end of the day, while I agree that directors’ remuneration should be linked to performance, perhaps a little leeway can be considered for a turnaround company in the likes of FGV. Perhaps a reasonable degree of appreciation should be accorded to the new board members as a form of motivation for their efforts and commitment. 

Give them time

My humble view is to give them a year to bring about a desired degree of turnaround bearing in mind the atrocious financial situation FGV is in right now. After all, the FGV board members are all newly appointed.

Having been duly re-elected, it will be unfair to deny the directors meeting allowances and other critical benefits when a herculean task is expected of them all. Moving forward, my reckoning is that the chief concern should not just centre on the quantum of remuneration but how to engage major and substantial shareholders to foster better understanding and acceptance of the issues at hand and how to tackle them effectively. 

An outright rejection as per the outcome of FGV’s recent AGM may be too harsh on the directors who are all expected to commit and work hard to provide directions to turnaround the company.

Worst still, this can invite repercussion given that the directors – unhappy that they are deprived of their fees and other perks – might simply decide to resign en masse. This can then be a major blow to FGV which will have to waste more time and resources to recruit new directors.

Surely, in this age and time, we cannot longer expect people to render national service without being duly compensated for their efforts and commitments. Even our athletes who excel at world stage are conferred monetary rewards as a form of appreciating their sacrifices to the country.

What is done is done but looking back, I cannot help thinking that the current impasse could be avoided at all cost if the board of FGV has done the necessary shareholder engagements (especially with major shareholders and institutional investors) while not take things for granted.

This is itself an invaluable lesson to other companies on never undermining the importance of shareholder engagements and their voices.

The views expressed in the article represent the views of the writer and do not necessarily represent the official views of the Institutional Investors Council of Malaysia (IIC).

Lya Rahman is currently the adviser/secretary to the IIC. She was formerly general manager of the Minority Shareholders Watch Group.



FGV Chairman Dato Wira Azhar Abdul Hamid is a corporate leader known for speaking his mind up and standing up, for responsibilities.

As the CEO of MRT Corp, Azhar summarily quit almost five years when construction workers died in an accident during the construction of the Sg Buloh-Kajang line.

Azhar, who was in the largest oil palm plantation conglomerate Sime Darby since 1992 replaced Tan Sri Isa Samad as FGV Chairman in 2017.

Published in: on June 30, 2019 at 12:00  Leave a Comment  

Sodom-me Three

Are we going through another episode of buggery, with the arrest of complainant Haziq Abdul Aziz by the Police?

NST story:

Haziq nabbed at KLIA

KUALA LUMPUR: Police have arrested Muhammad Haziq Abdullah Abdul Aziz, the man who claimed to be in the sex videos that implicated a cabinet minister, at Kuala Lumpur International Airport (KLIA) this afternoon.

It was learnt that the 27-year-old Santubong PKR Youth chief was apprehended while preparing to board a flight to an unknown destination.

Bukit Aman Criminal Investigations Department director Datuk Huzir Mohamed, confirmed the arrest was made by a team from the Classified Crime Investigation Unit.


Every ten years, Malaysians have to be subjected to this roller coaster sordid politics of a heinous crime against morality.

It was then Deputy Prime Minister Anwar “Mat King Leather” Ibrahim of the separate buggery of speech writer Munawar Anis, adopted brother Sukma Saasmitamadja, lecturer Hairani Nafis, Meor Razak, and wife’s driver Azizan Abu Bakar.

Ten years later, political aide Mohd Saiful Bukhari Azlan.

These buggery acts was used by Anwar to turn the Malaysians into topsy turvy and split the nation really wide.

Anwar was convicted, twice and for the second time, exhausted the process for recourse till Gerontocracy Prime Minister Tun Dr. Mahathir Mohamad got him pardoned upon Pakatan Harapan’s successful take over the Federal Government and all but two State Governments in the 14GE concluded 9 May 2018.

Published in: on June 14, 2019 at 21:16  Comments (1)