Skip to main content

FGV pay hike for directors, was it justified?

The rakyat may not agree with the salary hike but perhaps it is time to reward the FGV and Felda directors
By ZAIDI ISHAM ISMAIL

KUALA LUMPUR June 24 - Rewarding a company's chairman and directors is a normal corporate exercise and is especially carried out when the concern makes a lot of profit.

 

Steering firms amid trials and tribulations in the corporate world is the fiduciary duty of the board of directors in any firm especially in public listed firms.

 

If the job is not carried out well, shareholders have the right to not re-elect the directors during annual general meetings for their inability to navigate the company out of loss.

 

In the case of Felda Global Ventures Holdings Bhd, netizens were livid yesterday on the increase of the salaries of FGV chairman and directors swamping social media with vitriol.

 

All resolutions were passed yesterday at its shareholders meeting which among others saw the salary of the chairman increasing to RM500,000 from RM180,000.

 

Was it a justified move?

 

FGV, Felda have been "suffering" for so long

Many people may not realize this or choose to forget but FGV and its parent Felda and 2, 3 million Felda families have been pressured by low crude palm oil prices for the longest time.

 

It's only last month that crude palm oil prices surged to a historical high of RM8,000 a tonne due to the Russia-Ukraine war.

 

But for the most part of the last decade, crude palm oil prices almost never breached the RM2,000 a tonne mark until now.

 

The rakyat may not agree with the salary hike but perhaps it is time to reward the FGV and Felda directors for their blood, sweat and tears all this while?

 

Companies must reward its board of directors

It is the job of the directors, led by the chairman, of any company to lead the entity towards profitability and manage any crisis.

 

Many would see it as a comfy job, of which they are driven around in their luxury cars attending meetings and sign on the dotted line.

 

But it is not easy to manage a multi-billion company amid a pandemic and a volatile corporate world, while at the same time remain dutybound to its investors as well as ensure the welfare of its workers.

 

Thus, it is the right of any company to reward its board of directors for their leadership and wisdom.

 

If this is not done, the directors just like the rank and file will be left demotivated and demoralised as their hard work over the years are not appreciated.

 

 

fgv

 

 

Smallholders are also rewarded

It is not true that only FGV directors get the bountiful harvest.

 

All smallholders are members of Koperasi Permodalan Felda which in turn owns 49 percent of FGV.

 

Thus, smallholders stand to be rewarded via dividend payments from Koperasi Permodalan Felda which is known to pay dividends as high as 30 percent.

 

Maybe it will pay even more this time around due to the exceptionally high income.

 

Smallholders who separately are also FGV shareholders will also get dividend payments.

 

Timing is everything

Perhaps the rakyat are not angry if the pay hike is carried out during good times.

 

Netizens are irked with the company as the hikes were done at a most insensitive time when chicken prices are skyrocketing and subsidies for cooking oil and eggs will be waived by July 1.

 

FGV could perhaps be more sensitive to the plight of the rakyat around it as they are the one who support FGV by buying it's Saji cooking oil. Timing is everything.

 

Felda must address age old issues

Netizens say FGV is just fortunate to make RM400 million profit in the first quarter of this year alone riding on robust CPO prices.

 

The fact of the matter is, FGV is still saddled with legacy issues such as smallholders refusing or slow to replant and high-cost production.

 

FGV is also lagging compared to its peers in terms of oil extraction rate and yield of fresh fruit bunches as well as a dire shortage of foreign workers.

 

Once FGV's house is in order, perhaps only then will netizens refrain from making a ruckus and stop lambasting the company. - DagangNews.com