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After criticisms over pay hike for board members, FGV says already hired consultant to vet renumerations

Publish date: Tue, 28 Jun 2022, 09:17 AM

KUALA LUMPUR, June 27 — FGV Holdings Berhad (FGV) today said that it had appointed a consultant to vet the remuneration packages paid to its non-executive chairman and directors, following intense backlash over their huge salary and allowance bump which was finalised at its 14th annual general assembly (AGM) last week.

In a statement today, the FGV Board said that its chairman, Datuk Dzulkifli Abd Wahab has also agreed to waive his RM40,000 yearly fees as the chair of the Board Sustainability Committee, until the next AGM in 2023, as well as meeting allowances of RM2,000 per meeting.

“In 2021, Datuk Dzulkifli Abd Wahab did not utilise his entitlement for benefits relating to entertainment allowance, club membership and personal bodyguard,” the statement read.

FGV said that in 2019, the non-executive chairman’s fees were reduced from RM600,000 to RM300,000 together with some abolishment and reduction in certain benefits. In 2022, the board appointed an independent consultant to conduct a review and benchmarking on the non-executive directors’ remuneration.

“The non-executive chairman was currently being accorded to receive on a cash basis, director fee of RM300,000 per annum (or RM25,000 per month) and car allowance of RM180,000 per annum (or RM15,000 per month). FGV Board was advised by the independent consultant that the car allowance accorded to the non-executive chairman be replaced with the provision of a company car as it is not reflective of market and sectorial norms as companies do not generally monetise the provision of a company car benefit in the form of allowances.

“Pursuant to the advice, FGV Board proposed to provide a company car to the non-executive chairman and maintain the amount of cash accorded to him previously by converting the car allowance of RM180,000 to board fees. Hence, there is no increase in the total cash received by the non-executive chairman,” it said, adding that Dzulkifli also intends to use an existing car belonging to a subsidiary company to be the company car with an annual budgeted expense of not more than RM180,000 as per approved at the AGM.

According to the AGM agenda paper cited by the Malay Mail, the proposed remuneration changes did not state that the RM180,000 increment in board fee for Dzulkifli was to be converted from the car allowance allocated for the NEC.

Under the item “proposed new benefits payable”, it was suggested that Dzulkifli be given “one company car of at least 2000cc with RM180,000 per annum of car utility expenses”, without stating that the sum would be converted as board fee.

Shareholders had passed 13 resolutions at FGV’s AGM, among others, raising Dzulkifli’s yearly fee as non-executive chairman to RM480,000 from RM300,000 previously.

Dzulkifli will receive a monthly fee of RM40,000 as non-executive chairman of the board, up by RM15,000 as part of a new fee structure that took effect on June 24.

At the same time, seven other FGV non-executive directors will receive a monthly fee of RM12,500 until the next AGM, a RM2,500 increment.

FGV was listed on the Kuala Lumpur Stock Exchange (KLSE) in 2012 as an investor favourite at an offer price of RM4.55 per share in what was hailed as the world’s second-largest initial public offer after Facebook.

The share price has plunged since the listing. On June 23, 2021, FGV share price traded at just RM1.30.

The company’s poor performance was seen as one of the major political setbacks that drove Barisan Nasional (BN) out of power at the 2018 elections.

Under the Pakatan Harapan (PH) administration, shareholders were directed to block attempts to raise the remuneration of FGV’s board members.

The move was part of the recommendations made in the White Paper tabled by the PH government to help put FGV’s finances back in the black and improve Felda settlers’ living standards.

FGV, which is in the agribusiness and food industry, is an affiliate of the statutory body, the Federal Land Development Authority (Felda).

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