Minority shareholders cheered when Genting Malaysia Bhd chairman and chief executive Tan Sri Lim Kok Thay announced at the group’s annual general meeting last week that he would take a 20% pay cut to offset the effect of heavy gaming taxes, which weighed on the group’s financial performance.
In the 2019 budget, Putrajaya raised casino duties to 35% from 25% and increased gross gaming income and gaming machine duties to 30% from 20%. Annual casino licence renewal fees were bumped up by RM30 million to RM150 million and machine dealer licence fees from RM10,000 to RM50,000.
Two weeks ago, The Edge reported that Lim was the best-paid among the CEOs of all Bursa Malaysia-listed companies last year, taking home RM183.07 million based on Genting Bhd’s annual report disclosures. His compensation rose 9% from the year before, although Genting’s net profit fell 5.5% in the same period.
It is a positive development indeed when shareholders take the opportunity to raise important issues at AGMs. In fact, it was reported that certain shareholders believed Lim should take a 50% pay cut.
The issue persists at other PLCs — more so among family-controlled companies — where CEOs continue to be paid huge amounts even when profits fall. Shareholders cannot be blamed for feeling aggrieved.
Ultimately, the interests of shareholders and CEOs have to be aligned. Perhaps it is time Securities Commission Malaysia and Bursa insisted on the boards of directors at public-listed companies disclosing and articulating clearly the basis of determining CEO salaries in the annual report. Only then will shareholders who have to vote on it know and understand whether or not the CEO’s remuneration is fair.