Monday, May 6th, 2019
KUALA LUMPUR: The top three companies with the highest paid CEOs were Genting Bhd, Genting Malaysia Bhd and Sapura Energy Bhd, according to the Securities Commission’s (SC) Corporate Governance Monitor 2019.
Among the top 100 listed companies, the highest CEO remuneration was RM168 million (Genting) and the highest CEO remuneration among government-linked companies was RM33.9 million (IHH Healthcare Bhd).
The median CEO remuneration ranges from RM1 million to RM7.98 million across 13 sectors.
The top three sectors with the highest median CEO remuneration were telecommunications and media followed by financial services and utilities sector. REITs recorded the lowest median for CEO remuneration.
The consumer products and services sector had the highest number of companies on the top 10 listed companies with the highest paid CEOs. The companies were Genting, Genting Malaysia and AirAsia Bhd.
A total of 10 out of the top 20 listed companies with the highest paid CEOs were family-controlled companies.
“It is observed that listed companies which are ranked high in terms of CEO remuneration may not necessarily be ranked high in terms of return on equity and return on asset, and vice versa,” the report said.
The CG Monitor 2019, released by the SC today, looks at the remuneration of CEO of the top 100 listed companies on the Main Market of Bursa Malaysia, which were selected based on their market capitalisation as at Dec 31, 2018.
The total market capitalisation of these companies stood at RM1.44 trillion, representing more than 80% Malaysia’s total equity market capitalisation. The CEO’s total remuneration represents the sum of salary, bonus, benefits-in-kind and other emoluments.
While 100 listed companies were selected, data on CEO remuneration were only available for 84 listed companies; eight listed companies did not disclose their CEOs’ remuneration in their annual reports while eight listed companies disclosed the CEOs’ remuneration in bands of RM50,000.
Listed companies which are family-controlled and GLCs were also identified. Out of the 84 listed companies, 25 were family-controlled, 28 were GLCs and the remaining 31 were categorised as other listed companies.
SC chairman Datuk Syed Zaid Albar said in fact, mid and small cap companies are among the trailblazers in the adoption of the corporate governance best practices, including disclosing remuneration of senior management.
For example, 20 small cap companies adopted the Step Up Practice 7.3 (disclosure of detailed senior management remuneration), compared to only three large companies, which reflected the degree of appreciation for transparency in relation to senior management remuneration even among smaller companies.
Asian Corporate Governance Association founding secretary-general Jamie Allen said one has to look at the context of the remuneration and not just the number, even though it may seemed large.
He explained that if there is a link to performance and there is a good reason why CEOs are being paid large amounts of money, coupled with the fact that the company has performed extremely well, and the CEO has made reasonable targets and benchmarks, with the pay being in line with other companies in the same industry, then the pay is considered reasonable.
“What investors or what we would be worried about is there is a large pay with no explanation of why, no clear link to performance. And if the company performance is declining, then that can be a red flag,” Allen told reporters, adding that this needs to be looked at on a case-by-case basis.
He said market capitalisation is a reasonable benchmark, because if a small company is paying its CEO large amounts of money, that also can be a red flag.
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KUALA LUMPUR: US President Donald Trump’s vow to hike tariffs on US$200 billion of Chinese goods last week to speed up the trade talks dragged down Asian equities, including Bursa Malaysia, at Monday’s close.
At 5 pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 4.5 points to 1,632.80 from Friday’s close of 1,637.30.
After opening 5.26 points weaker at 1,632.04, the benchmark index moved between 1,623.61 and 1,633.66 throughout the session.
On the broader market, losers beat gainers 790 to 150 with 324 counters unchanged, 641 untraded and 33 others suspended.
Turnover fell to 2.79 billion shares worth RM1.70 billion from 2.82 billion shares worth RM2.11 billion on Friday.
Hong Kong’s Hang Seng fell 2.90% to 29,209.82, Japan’s Nikkei 225 slipped 0.22% to 22,258.73, the Jakarta Composite Index eased 0.99% to 6,256.65 and Singapore’s Straits Times Index was 2.98% weaker at 6,256.65.
“Trump, who calls himself “Tariff Man”, has vowed to increase tariffs on US$200 billion of goods to 25% from 10%, saying the long-standing trade dispute is progressing at a slow pace.
“As a result, China is considering cancelling the trade talks, which are supposed to take place this week,“ a dealer said.
Last year, Trump and his Chinese counterpart Xi Jinping agreed to a truce to boost the stock markets.
The world’s two largest economies have since 2018 imposed tariffs on US$360 billion in two-way trade.
“Markets will be left clueless, hence we expect cautious trading this week,“ he added.
Back home, telecommunications providers Axiata Group Bhd and DiGi.Com Bhd were under the spotlight on Monday following the proposal between Axiata Group Bhd and Norway-based Telenor ASA to create a new global champion with discussions to combine their Asian operations under a new merged global entity, MergedCo.
Telenor has a 49% stake in Digi.com.
In a filing to Bursa Malaysia, Axiata said both parties would work towards finalising an agreement within the third quarter of 2019, resulting in Telenor being the majority shareholder of MergedCo with an anticipated 56.5% stake, with Axiata holding the remaining 43.5%.
Locally, the merger of Celcom Axiata Bhd (Celcom) and Digi.Com Bhd will make the new entity the largest mobile operator in Malaysia.
This week, investors will also be focusing on the release of the first quarter of 2019 (Q1 2019) gross domestic product numbers due on May 16 and Bank Negara Malaysia’s monetary policy announcement on May 7.
Among heavyweights, Maybank rose four sen to RM9.30, Public Bank increased two sen to RM22.56, Petronas Chemicals dropped 15 sen to RM8.80 while both Axiata and Digi were flat at RM4.04 and RM4.52 respectively.
Shares of Axiata and DiGi were suspended from 9 am to 5 pm today due to the merger announcement. Trading resumes tomorrow at 9 am.
Of the actively-traded stocks, Ekovest fell 4.5 sen to 91 sen, Sapura Energy slipped 1.5 sen to 32 sen, while Lambo and Priceworth inched down half-a-sen to seven sen and nine sen, respectively.
The FBM Emas Index was 69.59 points lower at 11,542.17, the FBMT 100 decreased 55.78 points to 11,376.18 and the FBM 70 depreciated 169.08 points to 14,352.31.
The FBM Emas Syariah Index was 94.91 points weaker at 11,684.86 and the FBM Ace Index lost 134.72 points to 4,511.74.
Sector-wise, the Financial Services Index was down 49.27 points at 16,883.66, the Industrial Products and Services Index was 2.22 points easier at 167.12 while the Plantation Index edged up 0.49 point to 7,202.36.
Main Market volume fell to 1.89 billion shares valued at RM1.52 billion from 2.02 billion shares valued at RM1.96 billion last Friday.
Warrants turnover increased to 568.18 million units worth RM132.91 million versus 404.02 million units worth RM91.14 million.
Volume on the ACE Market decreased to 324.63 million shares valued at RM52.67 million against 382.70 million shares valued at RM55.54 million.
Consumer products and services accounted for 182.89 million shares traded on the Main Market, industrial products and services (423.99 million), construction (445.74 million), technology (106.51 million), SPAC (nil), financial services (32.90 million), property (177.28 million), plantation (21.79 million), REITs (12.48 million), closed/fund (nil), energy (414.88 million), healthcare (17.39 million), telecommunications and media (16.57 million), transportation and logistics (17.87 million), and utilities (21.42 million).
The physical price of gold as at 5pm stood at RM165.39 per gramme, up RM1.73 from RM163.66 at 5pm last Friday. — Bernama
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