Earning a fair living in Malaysia is getting bad to worse if we study the kind of salary or Directors’ Remunerations they are offered in 2009 period.The highest paid CEO or Director reportedly earned almost RM100,000,000.00 a year or more (but this is because he is the owner or majority shareholder of the company)and the highest paid CEO of a GLC reportedly earned almost RM10,000,000.00 a year with salaries,bonuses and all kinds of perks lumped in the year.
There are also about a few hundreds CEOs that are paid over RM1,000,000.00 a year as their annual director’s fees,perks and what have you in store for them.The below normal average CEOs in the Malaysian Listed Companies can easily earn about RM300,000.00 a year or more as also reported in the annual survey of Malaysia’s Directors’Remunerations published in the Malaysian Business magazine.
So,now we have all these ‘hoo-hah’ about the normal Malaysian worker getting paid only RM600 a month while their CEOs can get paid about RM3,300.00 per day if these CEOs earn RM1 Million per month and worked 25 days a month f0r 12months excluding their bonuses and perks.
Ramli have written a similar article in this BLOG about these problems of high salaries as compared to a fair share of hard work,smart thinking and sometimes shedding some blood at the workplace due to injuries or workplace accidents etc…Peter Drucker,one of the World’s Top Management Guru have once reminded and stated that “a CEO’s salary must not be more than 20 times than the normal average manager or maybe worker” and ex-President of Singapore Mr.Lee Kuan Yew also once said “if you want to get rich or be wealthy than be a businessman don’t work with the government or as an employee.”In Islam,then earning a salary so much greater than your worker can be considered “haram” as examples of the PIOUS Caliphs clearly showed that possessing great wealth or accumulating great wealth for oneself is not the norm or good practice of Muslim Leaders.So again where’s the balance or best solution to make all earnings of employees from the garderner to the CEO is made fairly and with great wisdom and Blessed by Allah SWT!
Malaysia is “fighting” for a fair wage structure ie.about RM 1500 per worker to meet to this current cost of living expenses especially in the urban areas and if you live in excess then RM1,500 is not enough for you yet for your family of 5 persons.So,actually teaching the Rakyat to live with prudence,within their means and no unnecessary borrowings from all Riba’ based bodies either the conventional banking or alongs’ will at least help them to “pull through” their lives to a more harmonious,peaceful and stress free living for them and their family.Inshallah.
Read this article in NST.Online:
MTUC urges Najib to review Proton wages
2010/03/11
By Anis Ibrahim
news@nst.com.my
PETALING JAYA: Skilled assembly workers in Proton Holdings, the national car producer, are earning below the country’s poverty line, the Malaysian Trades Union Congress said yesterday.
The RM600 salary for Proton’s estimated 3,000 assembly workers is the lowest among the country’s government-linked companies (GLCs).
MTUC secretary-general G. Rajasekaran said the sum was way below the poverty line of RM720.
“Not only is Proton a GLC, it also produced our country’s first car, which is supposed to be a source of national pride.
“There should be some minimum standards for its workers but, unfortunately, after Employees Provident Fund and Social Security Fund deductions, their take home pay is only RM520,” he said here yesterday.
He cited several GLCs for comparison.
Malaysia Airlines and MISC Berhad are among the GLCs at the top of the rung, with their lowest salaries at RM1,000.
Next are TM Berhad and Tenaga Nasional Berhad, where the minimum pay is RM800.
Just above Proton is Pos Malaysia, which pays its postmen RM635 a month.
Rajasekaran said the salary for Proton’s assembly workers had not changed much since they were paid RM315 a month when the first collective agreement was concluded in 1987.
Although the amount had risen over the past two decades, the present salary of RM600 had not changed since 2003.
“We are disappointed that Proton insists on maintaining its low-wage policy,” he said.
“This is a clear case of exploitation.”
A Proton employee, who wanted to remain anonymous, said assembly line workers were dissatisfied with the company.
“Their salary hasn’t gone up since 2003 and they’re tired of what’s going on.
“What they’re most unhappy with is that Proton employs only Malaysians; it has a locals-only policy, and yet they are paid so little,” the employee said.
“How can it be fair to pay RM600 to someone who puts together the national car?”
MTUC will be submitting a memorandum on the matter within the week to Prime Minister Datuk Seri Najib Razak, Proton chairman Datuk Mohd Nadzmi Mohd Salleh and Proton founder and former prime minister Tun Dr Mahathir Mohamad.
“We urge the prime minister to urgently intervene and take steps to raise the wages to a minimum level of RM1,000, similar to other GLCs,” Rajasekaran said.
Reader’s Comments
(Latest Comments Displayed First)
Tunku Fazuin Tunku Zainal
If lodging and meals at proton city is provided, then it is fair value. If its not then it needs to be looked into. Higher wages isn’t the only solution, stronger ringgit and inflation control is a better optio. Whats the point of making 10K if in actual monetary terms its not worth more than 4.5K.
wonder:
1.Just close down the factory since cannot give good wages to worker.
2.abolish AP – no need to support buying local manufactured car.
3. No AP – rakyat can get cheaper car.
4. Rakyat can enjoy better living (pay less installment for car)
Ethan:
Kindly share more details via media with Malaysia public. Other than RM600 monthly wages for Proton workers. What else do they received. Please put them down in dollar and cent calculation. Only that will make Malaysia public to understand more how Malaysia GLC operating inside Malaysia.
odette:
i agreed with cpa..there is more benefit..not judge on the wage only. eventhough 600 but they got more than that.
Chong VH:
If it is true, then the workers certainly deserve a pay rise. However, I tend to take it with a pinch of salt as trade unionists have a tendency to manipulate figures to prove their point. Before taking sides, let’s find out the actual situation.
shah:
A point to ponder. Does the low wages of the assembly workers has any direct relation to quality of Proton cars.
noorisa:
RM600 is only basic pay, it does not include the overtime that the staff are earning. Which is usually more than what they earn through their basic pay.
cfa:
Its more than RM600 when u consider that meals and uniform are provided. I think at Proton City, even accommodation is provided.
Patrick:
I support MTUC’s call. I can’t believe locals are still paid with such low salaries. Proton cars are not cheap considering that they are “Made In Malaysia”. However, I sure hope that the quality of workmanship will improve in tandem with the increase of their minimum wage.
Here some old reports for your reading:ref:biz.thestar.com.my
Saturday December 13, 2008
Are some CEOs worth their huge pay packets?
By TEE LIN SAY
Nazir the highest-paid GLC CEO
WHILE it was an issue that started as a financial cry for help, the automakers bailout plan in the US soon became an issue of accountability.
After being criticised during their last trip for arriving in Washington in corporate jets, not only did the chief executives of Ford, GM and Chrysler drive to the nation’s capital in hybrid cars, but they agreed to accept annual salaries of US$1 if the US Congress okayed their bailout plan. The pledges were part of the automaker’s proposal delivered to Congress, for the Detroit 3’s request to win a piece of US$14bil in emergency loans.
Huge sacrifices are made by these corporate chieftains in their aim to prevent the auto companies from collapsing, saving thousands of factories and millions of related jobs in the US recession.
Meanwhile, the proposed US$14bil bailout plan has been opposed by the US Senate, raising the spectre of an industry collapse.
Abdul Wahab Jaafar Sidek
The question arises: will Malaysian corporate leaders do the same should they be faced with the same grim scenario?
CEOs’ compromise
As the economy grapples with an enduring credit crisis, paycuts by senior executives are expected to be more widespread.
Last month, it was announced that Singapore’s Prime Minister Lee Hsien Loong will lose 19% of his salary because of the global economic turmoil but will still earn almost US$2mil a year.
South-East Asia’s biggest property developer CapitaLand has also announced that its chief executive Liew Mun Leong will take a pay cut of 20% as part of company-wide measures to cope with a global downturn.
Moving into 2009, as public-listed companies (PLCs) cut cost and freeze recruitment, many expect a similar stance to be taken by their chief executive officers (CEOs).
“It will be a case of leadership by example. Times are bad, so the CEO makes a sacrifice to show his sincerity to his troops. There is also a likelihood that a stronger trend of performance-based bonuses will emerge. The key performance index (KPI) will be a stronger measurement for rewarding staff,” says a human resource consultant.
He adds that in recessionary times, sooner or later, the issue of headcount will transpire.
A director of a consultancy firm says that for now, Malaysia has yet to see any retrenchment or voluntary separation schemes.
Minority Shareholder Watchdog Group CEO Abdul Wahab Jaafar Sidek says that if there is any retrenchment, it has to be carried out smoothly, quickly and cordially, with least disruption to business.
“The CEOs and executive directors should be the first to make sacrifices and if need be, even forgo their directors’ fees,” he says.
Abdul Wahab says that what is important is how the CEO can raise productivity and efficiency during hard times under his leadership. “The outstanding CEOs must be rewarded appropriately. For, in difficult economic situation there will be some outstanding CEOs who can still shine.”
Are Malaysian CEOs fairly remunerated?
Reporting compensation of CEOs on an individual basis is the practice in the United States, Britain and Australia.
Generally in Asia, share owners do not know exactly how much corporate funds are going to the individuals entrusted to run the business. Reasons for this are a lack of regulatory measures and inadequate information in financial reports.
In Malaysia, while remuneration to company directors is listed on the annual report, it is hard to gauge as salaries of its directors are lumped together.
Most of the PLCs disclose the directors’ remuneration in bands.
“Unless there is greater transparency on the amount paid to directors or CEO, shareholders will find it difficult to assess whether they are fairly compensated, and more importantly whether the remuneration is linked to corporate and individual performance,” says Abdul Wahab.
There are also instances where the CEOs are not members of the board, therefore their remuneration is not disclosed in the annual report.
“In my opinion, the renumeration packages of Malaysian CEOs are quite fair. Even in good times, it isn’t exorbitant, hence in bad times, there isn’t likely to be a huge pay cut,” says the director of a consulting firm.
Malaysian CEOs (after converting to dollar terms) are regarded as the lowest paid in Asia Pacific, says a director of the consulting firm, adding that the salaries of CEOs who run big government linked companies are “honourably low and hardly exciting.”
At the same time, he opines that the American model of richly rewarding their CEOs as a bit of an overkill.
“In America, everybody wants to be a CEO, because the packages are so lucrative. Yet during bad times, or when earnings are poor, the CEO is punished ruthlessly. That is why they say CEOs in the US live quarter to quarter!”
He adds that there are many factors that determine a decent CEO package. To link the CEO’s pay package to the economic environment could be a double-edge sword.
“For instance, if Malaysian plantation CEOs were to tie their salaries to their KPIs, would this mean that when CPO prices increase three-fold, there would also be a three-fold increase in the CEO’s pay?” he asks.
Likewise in bad times, does the CEO deserve a big pay cut when it might be market forces bringing demand down?
Abdul Wahab makes some interesting observations from its MSWG-NUBS Corporate Governance Survey 2008.
“It was surprising to find instances of good Samaritans on the boards of corporate Malaysia in the context of directors’ remuneration,” he says.
The survey noted that two companies did not pay salary to their executive directors (EDs) for the financial year 2007. They are Integrax Bhd and Borneo Oil Bhd.
While the ED of the former only received directors’ fees even though the company was reporting a profit, the ED of the latter company – which reported a loss – was remunerated substantially with share-based payments.
In the case of Sinora Industries Bhd, the ED was not remunerated at all even though the company reported operating profit for the year.
Invisible perks
Many have surely heard of CEOs who charge meals costing a week’s wages to their company’s expenses.
Or those that travel business class and stay in luxury hotels? These are perks which are clearly not seen in annual reports.
The human resource consultant says that he does not see many PLCs abusing their invisible perks.
“In reality, it happens less nowadays. Especially for executives in listed companies, they are pretty wary of being scrutinised for such things. Even family-owned businesses are subject to public disclosures.”
“I think CEOs would rather demand better bonuses, stock options or fringe benefits for themselves. As a CEO of a public listed company, there is a reputation to maintain,” he says.
Wahab agrees that flagrant abuses are not rampant in Malaysia. He sums it up by saying that while there is a need to pay CEOs attractively to run the company successfully, there is also a need to link rewards to corporate and individual performance.
BUMIPUTRA-COMMERCE Holdings Bhd’s chief Datuk Nazir Razak, stood out as the highest paid CEO with a disclosed remuneration of RM9.35mil for 2007. This doesn’t come as a surprise considering Nazir is seen as the single force behind CIMB’s dominance and aggressive venture into Thailand, Indonesia and China.
The salaries of other GLC heads pale by comparison. In 2007, the other highest paid CEOs in GLCs include the then Maybank CEO Tan Sri Amirsham Abdul Aziz (RM2.71mil); Sime Darby Bhd’s Datuk Seri Ahamd Zubir Murshid (RM2.05mil); Bursa Malaysia Bhd’s Datuk Yusli Mohamed Yusoff (RM1.97mil) and Boustead Holdings Bhd’s Tan Sri Lodin Wok Kamaruddin (RM1.85mil).
For his efforts in turning around Malaysia Airlines, Datuk Seri Idris Jala received a remuneration of between RM950,000 and RM1mil in 2007.
It would appear that many of the GLC heads receive lower pay compared to their non-GLC peers.
The highest paid CEO in Corporate Malaysia continues to be Genting Bhd’s Tan Sri Lim Kok Thay at RM86.5mil. Other highly paid heads are those from family-owned businesses such as IOI Corp Bhd, OSK Holdings Bhd and YTL Corp Bhd.
Astro All Asia Network Plc’s group CEO Ralph Marshall received RM3.4mil while Puncak Niaga Holdings Bhd executive chairman Tan Sri Rozali Ismail received RM5.2mil.
It is interesting to note that many main board and second board companies pay their CEOs less than RM400,000 a year. These include Mycron Steel Bhd, Scientex Packaging Bhd and Jobstreet Corp Bhd among others.
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