KUALA TERENGGANU – Terengganu Development Management Berhad (TDM) perlu menjelaskan kepada seluruh pelaburnya dan rakyat Terengganu mengapa anak syarikat kerajaan negeri itu membayar duit raya lebih kepada para pengarahnya.
Resolusi ke 9 yang dicadangkan dibawa ke Mesyuarat Agong Luarbiasa TDM yang akan berlangsung pada 29 September menyatakan; Bahawa elaun sebanyak RM8,000 akan dibayar kepada setiap pengarah dan RM10,000 Pengerusi Lempaga Pengarah sempena sambutan hari raya eidul fitri.
Timbalan Editor sebuah akhbar harian berbahasa Inggeris berpendapat, tidak ada masalah untuk menjadi seorang pemurah sekiranya seseorang menggunakan wang sakunya sendiri, namun bukan mengagih-agihkan ‘wang dana’ yang merupakan amanah kerana ia juga turut dimiliki oleh orang lain
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WILL the shareholders of TDM Bhd still be in a festive mood on Sept 29? On that day, the plantation player will hold an extraordinary general meeting (EGM) in Kuala Terengganu to vote on nine resolutions.
The first eight are on the proposed grant of share options to the TDM board members and its chief executive officer.
The ninth resolution is less typical: “That an allowance of RM8,000 for each director and RM10,000 for chairman be approved for payment in conjunction with the celebration of Hari Raya Aidilfitri 2010.”
Other than the chairman, TDM has six directors. This means the total allowances will amount to RM58,000. It’s not a huge sum, particularly when you compare with last year’s net profit of RM56mil and total directors’ remuneration (including benefits-in-kind) of RM1.46mil.
Nevertheless, it doesn’t hurt to take a closer look at this idea of paying directors extra to mark a festival.
By seeking shareholder approval of the proposed Hari Raya allowance at the EGM, the company is playing by the book. This complies with the Companies Act and Bursa Malaysia’s listing requirements.
However, the company is fuzzy about the basis of the allowance. The circular to shareholders offers a rationale for the proposed grant of share options, but not for the allowance.
Yes, we are told that the allowance will be paid “in conjunction with the celebration of Hari Raya Aidilfitri 2010.”
And yes, it’s reasonable to conclude that the allowance is a form of reward for the directors’ time and effort in carrying out their boardroom duties. Still, we need to hear it straight from the horses’s mouth, and the more details, the better.
Over the years, there have been listed companies that have asked shareholders to approve retirement gratuity payments for long-serving directors, and the amounts involved could go up to hundreds of thousands of ringgit each.
Inevitably, the companies have pointed out that these directors had contributed a lot in their many years with the companies. Convincing or otherwise, one could appreciate these attempts to justify the payments.
The lack of explanation for the TDM allowance is unfortunate because it suggests that there is no firm and clear policy for such payments.
TDM’s largest shareholder, with a 53% stake, is Terengganu Inc Sdn Bhd, the state’s investment arm. Another state government-owned entity, Perbadanan Memajukan Iktisad Negeri Terengganu, owns 15% of TDM.
Terengganu Inc also controls two other listed companies, Golden Pharos Bhd (57%) and Eastern Pacific Industrial Corp Bhd, or EPIC (40%), but neither has proposed a similar allowance for their directors.
So why isn’t payment of the allowance a group-wide move? Perhaps we can rule out Golden Pharos because it is knee-deep in red ink, but EPIC, which is in oil and gas and port operations, seems to be faring well.
In fact, its net profit grew almost 90% last year, whereas TDM’s shrank 44%. The apparent inconsistency within the Terengganu Inc stable is hardly comforting.
It doesn’t help either that the proposal to pay the allowance seems to be have been hastily put together. It was as if the plan popped up as an afterthought.
Among the resolutions for the company’s May 17 AGM was one on the directors’ remuneration for 2010, but this didn’t include the allowance.
Then on Aug 11, the company announced that it would convene an EGM to seek shareholders’ approval of the proposed grant of options. Still no mention of the Hari Raya allowance.
That came on Sept 8, when TDM made a brief announcement of its intention to secure endorsement for the proposed allowance, without specifying the amounts.
The numbers were only made known when the company published the notice of EGM five days later.
TDM could have planned better for this. After all, Hari Raya Aidilfitri is an annual event; it’s a matter of deciding early and disclosing the relevant particulars, regardless whether required by the rules or not.
For example, the shareholders, especially the minorities, should be told whether the allowance is one-off. If so, why is it given out this year? If the company plans to make such payments every Hari Raya Aidilfitri (or for that matter, in conjunction with other festivals), why not articulate that? Nobody is asking the company to make a legally binding commitment; all it is expected to do is be upfront about its plans.
Payments to directors shouldn’t be ad hoc and arbitrary. More thought ought to go into creating a well-defined framework that links directors’ remuneration to company performance and that attracts the best mix of boardroom talent.
Yes, the duties and responsibilities of directors are often onerous, but there are surely better ways to reward them than by giving duit raya. -TheStarOnline