Much has been said about the economic downturn and how companies have slashed jobs and staff bonuses to contain costs. Some managers even tell their staff that having a job in these tough times is a bonus, thus, hefty bonuses are not in the pipeline. 

How about the top guns who decide on company policy? Did they also bite the bullet with less take-home pay?

A random check among the 30 component companies of the FBM KLCI showed only a handful of companies reduced directors’ remuneration, including Genting Bhd and its associate Genting Malaysia Bhd (former Resorts World Bhd), Bumiputra-Commerce Holdings Bhd (BCHB), Berjaya Sports Toto Bhd (BToto) and PPB Group Bhd.

Despite a y-o-y drop in directors’ remuneration, Genting still tops the list, paying the most to its directors in FY2008, ended Dec 31, although it isn’t making the biggest profit among companies listed on Bursa Malaysia.

Genting’s RM80.9 million board remuneration is the highest,  followed by IOI Corp Bhd (RM48.9 million), YTL Corp (RM37.65 million), PPB Group (RM28.65 million) and UMW Holdings Bhd (RM26.2 million).

Genting’s annual report shows that its highest paid executive director took home RM77.6 million in FY2008 compared with RM86.5 million in FY2007. That is believed to be the compensation package of its chairman and chief executive Tan Sri Lim Kok Thay.

The RM77.6 million includes Lim’s salary as chairman and chief executive in Genting Malaysia, which owns and runs Genting Highland Casino that generates the bulk of the sprawling group’s earnings. Genting Malaysia’s annual report showed that the director who received the most remuneration, believed to be Lim, was paid more than RM37.2 million.

Genting’s net profit slid to RM983.4 million for FY2008 from RM2.56 billion the year before due to a huge impairment loss of RM781.5 million incurred by associate company Star Cruises Ltd.

Are the salary and bonus of Lim, Genting’s late founder Tan Sri Lim Goh Tong’s son, too high? Compared with Cheung Kong Holdings chairman Li Ka-shing — one of the world’s richest men — Lim’s pay appears to be high. The Hong Kong’s thrifty tycoon earned only HK$10,000 (RM4,516) as chairman of Cheung Kong, a conglomerate that owns the world’s largest container terminal operator and businesses in real estate, power generation and retail chains. Li’s son, Victor Li Tzar Kuoi, was paid HK$45.6 million last year.

Perhaps a better comparison may be Macau’s gaming tycoon Stanley Ho. Ho, as chairman of SJM Holdings Ltd, which operates casinos in Macau, took home HK$24.3 million (RM11 million), compared with the company’s net profit of HK$796 million for FY2008.

Buoyant crude palm oil (CPO) prices have boosted the earnings of plantation companies as well as the pay of their directors. IOI Corp’s highest paid executive earned RM41.1 million for FY2008 ended June 30. This is likely to be the emolument of its executive chairman Tan Sri Lee Shin Cheng. His two sons, Datuk Lee Yeow Chor and Lee Yeow Seng, are the executive directors of IOI Corp. Their compensation packages were between RM1.6 million and RM1.7 million, the annual report showed.

PPB Group Bhd, which is controlled by tycoon Tan Sri Robert Kuok, paid RM28.6 million to its directors, including RM18.4 million to those in its subsidiaries. Its chairman-cum-executive director Datuk Oh Siew Nam received RM3.8 million in FY2008. 

In Kuala Lumpur Kepong Bhd (KLK), one of the oldest plantation groups in Malaysia, total board remuneration amounted to RM4.57 million. Its CEO Datuk Seri Lee Oi Hian took home RM2.45 million. KLK’s net profit exceeded the RM1-billion mark for the first time for FY2008 ended Sept 30. Thanks to the strong CPO prices, the group’s net profit ballooned to RM1.08 billion in FY2008 from RM428 million in FY2004.

IOI Corp’s net profit of RM2.2 billion for FY2008 ended June 30 was more than double that of KLK, but the former’s board remuneration was nearly 10 times more than KLK’s.

There was a big jump of almost 100% in Sime Darby Bhd’s board remuneration. But the compensation in the world’s largest oil palm planter is still not as attractive as that of its peers. The group paid a total of RM6.1 million to its board members for FY2008 ended June 30, compared with RM3.3 million in the previous year. Chief executive Datuk Seri Ahmad Zubir Murshid’s emoluments increased to RM2.9 million, up from RM2 million in FY2007.

Interestingly, the job of running the country’s biggest English newspaper, The Star, was better compensated than managing Sime Darby. The pay of Star Publications Bhd’s former executive deputy chairman Datuk Steven Tan was RM6.45 million in FY2008, three times more than that of Zubir’s.

Tan, the highest paid professional manager of a public listed company in Malaysia, stepped down in March after 22 years of service in the print media group. Datuk Clement Hii has taken over the position. Is Hii getting the same pay cheque? He was tight-lipped on the matter when asked during an interview with The Edge in March, saying it will be known when the company issues its FY2009 annual report next year.

Astro All Asia Network plc group CEO Ralph Marshall, who is also an executive director of Tanjong plc, is also one of the highest paid professional managers. He received RM5.97 million in Astro and RM245,000 in Tanjong for FY2008. 

At YTL Corp Bhd, founder and executive chairman Tan Sri Yeoh Tiong Lay was paid a total of RM10.1 million, while his son Tan Sri Francis Yeoh received RM4.8 million for FY2008 ended June 30.

Public Bank Bhd’s founder-cum non-executive chairman Tan Sri Teh Hong Piow appears to be the highest paid banker. Teh took home RM6.96 million for FY2008, which is not surprising, considering that he heads one of the country’s biggest banks. Public Bank’s managing director and CEO Tan Sri Tay Ah Lek was paid RM5.15 million and executive director Datuk Lee Kong Lam, RM3.84 million.

Bumiputra-Commerce Holdigs Bhd’s (BCHB) group chief executive Datuk Seri Nazir Abdul Razak earned RM5.12 million for FY2008. Unlike Goldman Sachs, BCHB’s total board remuneration fell 39% to RM10.53 million from RM17.36 million in FY2007, reflecting perhaps the drop in the bank’s fee income from investment banking.

Malayan Banking Bhd’s former president and CEO Tan Sri Amirsham A Aziz took home RM4.86 million in FY2008 ended June 30. Hong Leong Bank Bhd managing director Yvonne Chia’s emoluments were RM2.49 million.

It has been observed that family-run companies tend to pay higher emoluments. Genting and IOI Corp reinforce that observation.

Another company is Tan Chong Motor Holdings Bhd whose directors earned RM15.8 million in FY2008. Of this, RM4.9 million went to executive deputy chairman Datuk Tan Heng Chew, and RM3 million to group managing director Tan Eng Soon. Both Tans are brothers. 

Also, Oriental Holdings Bhd’s chairman-cum-executive director Datuk Loh Cheng Yean, daughter of the late founder Tan Sri Loh Boon Siew, took home RM3.6 million, about 1% of the group’s net profit of RM362 million for FY2008. Her two brothers-in-law Datuk Wong Lum Kong, the group managing director, and Datuk Lim Su Tong, executive director, were paid RM2.85 million and RM1.25 million respectively.

Over to gaming company BToto, CEO Datuk Robin Tan was the highest paid, earning RM1.5 million for FY2008 ended April 30. The directors’ fees are not much. But the company’s income statement showed that some RM9.1 million was allocated as performance incentives for its directors.

Robin took over from his father Tan Sri Vincent Tan in December 2006. His brother Rayvin Tan is also an executive director in BToto.

In FY2007, Vincent received RM12 million in performance incentives, which was calculated at a rate of 2% on the amount of Sports Toto Malaysia Sdn Bhd’s annual pre-tax profit after it exceeded RM30 million. Sports Toto is the operating subsidiary of BToto.

This article appeared in Corporate page of The Edge Malaysia, Issue 767, Aug 10-16, 2009.