The guidelines on the remuneration of directors and key senior management of government entities are expected to be finalised by the end of this year, after taking into account views from all parties concerned, said economic adviser to the Prime Minister, Dr Muhammed Abdul Khalid (photo, above).
He said the comprehensive guideline will incorporate various international practices, enhanced corporate governance standards and ensure a well-balanced remuneration policy that takes into account a more long-term financial performance of entities.
Muhammed noted that once finalised, it would soon be disclosed to the public and statutory bodies.
In March during the Invest Malaysia Conference, Prime Minister Dr Mahathir Mohamad said the government is preparing a clear guideline on the remunerations to be paid out to directors in government-linked companies (GLCs).
The prime minister stated that some of them had been paid “obscenely high” salaries.
“It is better to pay higher increment to those at the lower level than at the top. Those at the top level are doing well but unfortunately, those at the bottom are not doing so well.
“After all, these people (lower income) are going to spend their money domestically which is good for the local economy, ” Muhammed told reporters in Kuala Lumpur yesterday.
He elaborated further by saying that not only Malaysia but other countries also have similar guidelines.
“In the United Kingdom, for instance, public companies’ executives cannot have a salary higher than the prime minister.”
However, he mentioned that the guidelines are not compulsory for private companies.
“It is not compulsory to disclose, but pursuant to Budget 2019, all the listed entities need to disclose what are their average salary, median salary and highest salary to the Securities Commission,” he added.
Earlier, Muhammed witnessed the signing of a collective agreement between the National Union of Bank Employees and HSBC after a three-year delay.
The collective agreement signed between NUBE and HSBC involved the bank’s customer service bankers (CSBs).
The agreement is effective from July 1, 2016, until June 6, 2019.
“This means all salary and other related adjustments will be backdated accordingly as agreed by the two parties,” NUBE general secretary J. Solomon said.
With the agreement, some 200 HSBC’s CSBs will receive backdated emoluments of between RM15,000 and RM36,000, 10 percent salary hike, as well as the cost of living allowance of RM600 per month.