This article first appeared in The Edge Financial Daily on November 28, 2019

KUALA LUMPUR: Shareholders of FGV Holdings Bhd have agreed to a revised fee structure for the group’s board of directors at an extraordinary general meeting (EGM) yesterday.

The revision entails the reduction of fees payable for the financial year ended Dec 31, 2018 (FY18) to RM1.1 million, along with RM490,272 in board committee fees.

At the meeting, 99.96% of votes cast were for the passing of six resolutions relating to the remuneration of its non-executive chairman and directors.

“The main change [in the remuneration structure] is the cutting of the chairman’s fees by 50% to RM300,000 from RM600,000 previously. The directors’ fees remain the same at RM120,000,” FGV group chief executive officer Datuk Haris Fadzilah Hassan told the press after the EGM.

The chairman’s revised fee will take effect from the start of FY18, until FGV’s next annual general meeting (AGM) in 2020.

He added that the group will also be reducing the payment of benefits payable to the non-executive chairman and non-executive directors.

Haris said FGV non-executive chairman Datuk Wira Azhar Abdul Hamid had previously waived some of his benefits for FY18 upon his appointment to the post, and that the outcome of the EGM means those waivers will stay — though Haris did not specify what they are — while other benefits will also be reduced or removed, going forward.

Among the new adjustments to the chairman’s benefits are: the removal of the option to use a company car, entitlement to home security, the removal of the option for escort and one escort vehicle, a reduction in the number of personal bodyguards from two to one, the removal of the entitlement to leave passage of RM50,000 per annum, and the removal of his entitlement to one mobile phone every three years.

Haris said there were some consultations held between the company and its major shareholders following the last AGM in June, when shareholders had voted against several resolutions on FGV directors’ remuneration.

At the time, its major shareholders Federal Land Development Authority (Felda), Koperasi Permodalan Felda Malaysia Bhd and the Armed Forces Fund Board voted against the resolutions for the payment of RM2.55 million in directors’ fees and RM1.18 million for non-executive directors. The Employees Provident Fund had abstained from voting then.

“We had discussions with the major shareholders to understand their concerns and the revised remuneration structure is the result of the discussions. It is also in line with what other GLCs (government-linked companies) have adopted,” said Haris.

Now that the issue has been settled, Haris said the board and management can move on and focus on FGV’s transformation programme.

“The board has been tasked with fixing historical problems at FGV. They have been working hard to restore shareholders’ value that was destroyed previously.

“With this issue settled, we can now focus on our transformation programme,” he added.