A bigwig in a government-linked company has been getting some flak lately regarding his board compensation package.
The board fees of the chairman of FGV Holdings Bhd was bumped up by a significant amount. This created a lot of chatter in the news and social media, much of it negative.
But before this story hit the headlines, there was the story of the retired chief secretary to the government being given a big position and pay with 1MDB, the infamous state-owned investment company.
He was placed there because the-then prime minister was surprised that he was paid “so little” in his government job. Perhaps this was the prime minister’s way of saying “thank you” for the gentleman’s services to the nation.
His responsibilities at 1MDB, by his own admission under oath, amounted to nothing. Even a state mufti was moved to declare such an income as not halal, which is indeed a rather refreshing twist to the usual halal-haram debate.
There’s a nice word in the English language – sinecure – that describes this situation well. It means “a position requiring little or no work but giving the holder status or financial benefit”. It ranks up there with pedicure and manicure – extremely nice but not for the likes of you and I.
FGV’s biggest shareholder, Felda, approved the increase in fees. Felda is, ironically, the authority charged with the nation’s massive poverty eradication projects. Times being what it is, with lots of ordinary rakyat suffering from inflation and other economic ails, the optics of this is not good.
Neither is that of a minister saying ministers taking a pay cut won’t solve anything. However, an economic analysis by an expert (my cat Fang) has predicted that eliminating half the Cabinet positions would reduce the national debt by 12.5% through savings in salaries, and the cost of Vellfire cars and police escorts.
As a side benefit, it would also reduce the average blood pressure of the population by 15 points; if done judiciously, it would also raise the average IQ of the cabinet by 25 points.
Anyway, FGV is technically the rakyat’s company. Many of its direct shareholders are Felda settlers, and citizens of Malaysia.
I have much experience working with the boards of publicly-listed companies. Technically, there exist special board committees that ostensibly conduct rigorous analysis to decide on the appointment, pay and benefits for the company’s top people.
While some of the people in these committees try to do the right thing, most just do whatever the big shareholders want them to do.
They are there to give the imprimatur of legitimacy, to rubber stamp what’s been agreed in the backrooms. Whatever changes they approve will benefit them too, including getting to keep their jobs.
If things get too hot, as in the case of FGV, there’s an easy solution: appoint a consultant! Consultants know their job is to take the blame, so they charge the companies accordingly, and the companies would happily pay.
I once had a senior manager who negotiated collective agreements with the unions at my company. He happily gave away the store because whatever was given to the union members, often at his recommendations, he got them too!
He even rationalised that since we’re working for a foreign company making tons of profit, what’s wrong with shunting part of it to us locals?
In the case of FGV, there’s a bit of a climbdown. The board took away the chairman’s car allowance of RM15,000 per month and gave him a 2 litre company car instead.
But he still keeps his company-paid personal bodyguard! However, I can’t imagine the chairman, or the bodyguard, wanting to be seen in a 2 litre car. They’ll be laughed at by their fellow chairmen and bodyguards.
And what is it with personal bodyguards provided for by so many of these GLCs anyway? We know they’re needed men, hence their big jobs, but are they wanted men too?
In some companies, a board chairman is one who either does nothing, or one who does everything.
The “does everything “ chairman runs things as if he’s the CEO, but one with no oversight to stop him from putting his wives, children and cronies in every part of the company’s business.
The big money for many directors comes from the allowances for their many meetings. If they feel they’re running out of meetings, they create new board committees and schedule more meetings, and hence earn more allowances, too.
The allowances can run into thousands of ringgit per meeting, with the meetings often in some exotic locations where you can bring your family along. It’s a great life actually, if you’re sure you can repent before you die.
Most companies, except possibly those whose directors or chairmen are also founders or owners of the companies, don’t give their directors personal bodyguards or cars; however, many GLCs do.
In the latter part of my career, I got to take away company cars, and instead gave allowances or added the value of the company car into the salaries.
Perks such as drivers and company cars create a massively negative impact on the company’s culture. They’re expensive and create an entitled mindset where more energy in the company is spent on politicking to get a better car than in delivering results.
The argument has always been that such perks are needed to bring in the best people. But four decades of dealing with all levels of talent tell me that people who do come because of company cars or personal bodyguards aren’t really the best at all.
I’ve never had a personal driver, even though I was entitled to have one. The kampung boy in me couldn’t handle being a “boss” while another kampung boy drove me around. Call it socialistic capitalism if you wish.
When asked why I turned down a personal driver, I said that it’s because I enjoy driving. But the reality is I also hate having to hold my farts in when I’m sharing the car with another human being!
Both are good, true reasons indeed.
A friend involved with a GLC is being driven to distraction, spending so much time and energy on ceremonies and protocol, and learning who among the glittering attendees is a Yang Berbahagia, a Yang Berusaha, or especially, a Yang Berhormat.
When I worked with a modern public-listed company, there were no special ceremonies to please the kayangan crowd. Nobody wasted precious time reciting long lists of titles, awards, honorifics and salutations.
We didn’t need to remember which YB is Yang Berhormat, which YB is Yang Berusaha and which YB is Yang Berbahagia. We just went on stage and said “hello everybody”.
Because we’re all YBs already – Yang Biasa. But not Yang Bodek.
The views expressed are those of the writer and do not necessarily reflect those of FMT.