The Incredible Growth In Malaysian CEO Pay

• It’s ALL about the money, money, money
  We just need your money, money, money
  We just wanna make our world dance
  It's all about the Price Tag

That's my modified version of the song sang by Jessie J. Love that song.

Now here's an article published on Aug 2004 by Bernama news.

• August 02, 2004 21:28 PM
  Malaysia's Directors Paid More Money In 2003
  
  KUALA LUMPUR, Aug 2 (Bernama) -- Directors of Malaysian public-listed companies are generally paid more money in 2003, given the improving economy and rising profits, according to a survey on directors' remuneration carried out by Malaysian Business magazine.
  
  The survey finds that there were more millionaire directors last year compared with 2002 as more top executives earned bigger bucks, Malaysian Business said.
  
  Top executive directors of companies such as Safeguards Corporation, IJM Corporation, Malaysia Airlines and Choo Bee Metal saw their pay packages hitting seven-digit figures.
  
  Meanwhile, their counterparts in IOI Corporation, Star Publications, Hwang DBS and Maxis Communications also enjoyed hefty hikes, as these companies enjoyed increasing profits, Malaysian Business said.
  
  The survey, which entered its third year, studied 548 companies which paid RM300,000 and more per annum to their highest paid directors.
  
  In total, these companies paid out a whopping RM1.13 billion to their directors in 2003.
  
  Malaysian Business said that Corporate Malaysia's highest-paid director is from Genting Bhd (Genting's chairman/president and chief executive officer (CEO), Tan Sri Lim Kok Thay who gets between RM40.15 million-RM40.20 million).
  
  "His remuneration package within the RM40.15 million-RM40.20 million band makes him possibly one of the very few, if not the only Malaysian director, to take home an eight-digit figure compensation," it said.
  
  The second highest paid director is from Resorts World, a subsidiary of Genting Bhd, whose compensation is in the RM16.65 million-RM16.70 million band. (Resorts World chairman, president cum CEO, Tan Sri Lim Koy Thay (RM16.65 million and RM16.70 million),
  
  These payouts, however, might have been paid to the same person taking into consideration the possibility of double counting.
  
  Ranking third is an executive from Berjaya Sports Toto, who earned a compensation package in the RM8.15 million-RM8.20 million band (Berjaya Sports Toto CEO, Tan Sri Vincent Tan gets between RM8.15 million-RM8.2 million).
  
  IOI Corporation dished out between RM6.90 million-RM6.95 million to its top executive putting him in fourth place (IOI Corporation executive chairman, Tan Sri Lee Shin Cheng (RM6.90 million-RM6.95 million).
  
  The fifth spot is taken by a director of IOI Properties, a subsidiary of IOI Corporation, with a remuneration of RM6.90 million-RM6.95 million (IOI Properties' executive chairman Tan Sri Lee Shin Cheng (RM6.90 million-RM6.95 million).
  
  Again this payout may have been paid to the same person, the magazine said.
  
  Malaysian Business also said that while the mountain of wealth got larger for some, there were also directors who took sizeable pay cuts in 2003.
  
  But more peculiar were the instances of directors being paid top dollar although the companies they helm fell further into the red or are in the Practice Note 4 category, which groups companies with negative shareholder funds, it said.
  
  The magazine said this phenomenon highlights a troubling issue about directors' remuneration in Malaysia -- that there is generally an absence of a link between company performance and directors' remuneration --.
  
  Nevertheless, it said that more companies have displayed good transparency standards by going beyond the minimum requirement to disclose the exact amount paid to each of their directors last year, but these companies still remain in the minority.
  
  "Strangely a handful of companies, which took that extra disclosure step in 2002, regressed to the minimum requirement of `band-width' disclosure in 2003," Malaysian Business said.
  
  Others in the list are:
  
  Star Publications (Malaysia), group managing director and CEO, Datuk Steven Tan Kok Hiang (RM6.35 million-RM6.4 million), Hwang-DBS (Malaysia), executive chairman and managing director Datuk Seri Hwang Sing Lue (RM4.42 million) Rashid Hussain executive chairman, Datuk Sri Sulaiman Abdul Rahman Taib (RM4.3 million- RM4.35 million).
  
  RHB Capital executive chairman, Datuk Sri Sulaiman Abdul Rahman Taib (RM4.3 million-RM4.35 million), MK Land executive chairman, Tan Sri Mustapha Kamal (RM3.652 million), Public Bank non-executive chairman Tan Sri Teh Hong Piow (RM3.65 million-RM3.7 million).
  
  Yu Neh Huat executive chairman, Datuk Dr Yu Kuan Chon (RM3.6 million-RM3.65 million), Landmarks managing director, Mohamad Abdul Halim Ahmad (RM3.1 million- RM3.15 million), PPB Group executive chairman, Ong Le Cheong (RM3.1 million- RM3.2 million), Edaran Digital Systems executive director, Mohd Shu'aib Ishak (RM3.05 million-RM3.1 million), Malayan United Industries chairman cum CEO, Tan Sri Khoo Kay Peng (RM2.9 million-RM2.95 million).
  
  Berjaya Group chairman cum CEO, Tan Sri Vincent Tan Chee Yioun (RM2.85 million-RM2.9 million), British American Tobacco (M) executive director, Russell Scott Cameron (RM2.812 milion), Berjaya Land CEO, Datuk Robin Tan Yeong Ching (RM2.8 million-RM2.85 million) and DRB-HICOM group chairman, Tan Sri Mohd Saleh Sulong (RM2.60 milllion-RM2.65 million).
  
  Malaysian Business, the country's premier business magazine published by Berita Publishing Sdn Bhd, also features every year the country's 40 Richest Malaysians and the MB100 list, comprising the choicest companies on Bursa Malaysia.

Early this month, the following article was published on Business Times. ( Would you care to compare some of the figures then and now? )

• Top ringgit for head honchos
  
  By Roziana Hamsawi Published: 2011/08/17
  
  The top 20 companies on Bursa Malaysia forked out RM455.6 million to directors last year in terms of total payout, up 22 per cent from 2009.
  
  KUALA LUMPUR: Directors in public-listed companies got paid more last year compared to the year before.
  
  Malaysian Business, in an annual survey of the "highest paid directors" published in its August 16 issue, said the top 20 companies on Bursa Malaysia forked out RM455.6 million last year in terms of total payout, up 22 per cent from 2009.
  
  Out of more than 600 companies surveyed, close to 270 directors raked in more than RM1 million in remuneration in 2010.
  
  The survey lists a total of 630 companies with remuneration band of RM300,000 and above as stated in their respective annual reports.
  
  Malaysian Business noted that only a handful of the companies were transparent in stating the exact remuneration of their top executives.
  
  "Interestingly, several companies with huge losses still rewarded their directors with huge payouts," it said in a press release yesterday.
  
  Genting Bhd topped the list with a big payout of RM111.48 million to its board, 21 per cent higher from the previous year.
  
  IOI Corp Bhd came in second with a total payout of RM56.29 million, 71 per cent more from the year before.
  
  Genting also had the highest remuneration band of RM106.65 million to RM106.7 million for a single director but did not name who the director was. The top executive listed is its executive chairman/chief executive officer Tan Sri Lim Kok Thay.
  
  Other companies with the highest remuneration band for a single director were IOI Corp, which paid out a remuneration band of RM53.05 million to RM53.1 million to its highest ranking director. This was higher compared to RM25 million to RM30 million it paid out in 2009, presumably to its director and founder Tan Sri Lee Shin Cheng.
  
  Genting's subsidiary, Genting Malaysia Bhd, which paid out more than RM42 million to its top executive, took the third spot.

And PMI Minorities Are Rewarded So Handsomely With This Privatisation Offer

Remember:

• "Pan Malaysian Industries Bhd (PMI) yesterday told Bursa Malaysia that it had received an unconditional takeover offer from a consortium of three companies at a cash offer price of 4.5 sen for each offer share."

Remember:

1.  18 May 1993. A 4 for 1 rights issue at 80 sen.
2.  31 Jul 1998. A 1 for 1 rights issue at 50 sen.
3.  19 Jun 2000. A 1 for 1 rights issue at 55 sen.
4. And lastly it had a 2 into 1 share consolidation.

Here's a simple question.

Has the minority shareholder being rewarded handomely by this 4.5 sen offer?

Let's look at a simple study where I assume a minority shareholder, named Ah See, owns 1000 shares of PMI at 0.50.

Ah See initial investment is rm 500.00

Let's see what happens to Ah See if Ah See held on as a minority shareholder till this very day.
1. 1993: 4 for 1 rights issue at 80 sen.

So Ah See's 1000 shares becomes 5000 shares.

Ah See tops up 3200.00

2. 1998: 1 for 1 rights at 50 sen.

So Ah See's 5000 shares becomes 10000 shares.

Ah see tops up another 2500.00

3. 2000. 1 for 1 rights issue at 55 sen.

Ah See's 10000 shares becomes 20000.

Ah See tops up 5500.00

Shares are then consolidated. 2 into 1.

So Ah See's number of shares shinks to 10000.00

Total top up 11,200.00

Initial cost 500.00.

Total investment: 11,700.00

PMI now gets privatisation offer at 4.5 sen.

Ah See own's 10000 shares. That means he will get 4500.00  450.00 ( oops! One zero too much! ) back if he accepts this privatisation offer.

Gulp!

Errrrr...... errrr...... errrrrrr...... do you think Ah See got rewarded handomely or do you think Ah See got screwed?

And What About The Shambolical Effort To Take PMI Private?

Posted on CGMalaysia.blogspot : PMI: a sad story for Minority Shareholders

• "Pan Malaysian Industries Bhd (PMI) yesterday told Bursa Malaysia that it had received an unconditional takeover offer from a consortium of three companies at a cash offer price of 4.5 sen for each offer share."
• The "infamous" GO (General Offer) with "delisting threat" against which Minority Investors hardly have any chance to fight unless they don't mind ending up with shares in an unlisted company (and even then their shares could be Mandatory Acquired). The price is only 4.5 sen, that sounds like a bloody shame, the share traded routinely higher than that, even in 2011:
  
  
  
  
  
  
  In the past 10 years several right issues which equal to negative dividend payments (from the investors to the company, if people don't subscribe they get further diluted at a low price). It booked routinely losses but due to the tight control through its Majority Shareholder it could not change its management, hoping for a new team to restructure the company.

I would like to highlight the rights issue.
 
1. 18 May 1993. A 4 for 1 rights issue at 80 sen.
2. 31 Jul 1998. A 1 for 1 rights issue at 50 sen.
3. 19 Jun 2000. A 1 for 1 rights issue at 55 sen.
 
And lastly it had a 2 into 1 share consolidation.
 
How?
 
You think minority shareholders are laughing all the way to the bank with this generous offer of 4.5 sen?
 
Ps; Try reading this posting dated 18 Dec 2007: PMI's rescue package
 
And also this posting dated 19 Dec 2007: What about MUI Ind?

Should JCY Be Worth 22 Sen Or Lower Now?

So JCY announced its earnings and it was really poor.

Remember the posting Is RHB's Downgrade Of JCY And Fair Value Call Of Only 22 sen Too Harsh?

Let me produce the screen shot again:

RHB, back in Feb 2011, felt that JCY should be downgraded to 22 sen based on the earnings estimate of 44.9 million.

And yes based on its share base of 2,044,860,000 shares an earnings estimate of 44.9 million would translate to an eps of 2.2 sen only. 

I know RHB then made a FUNKY Change Its Fair Value On JCY! shortly after that incredible downgrade!

Anyway, I find it so ironic now.

RHB downgrade on Feb 2011 was shocking. It was the only research house that said JCY could earn as low as 44.9 million for this fiscal year.

Now let's compare to what JCY is doing..

TTM stands for trailing twelve months earnings and JCY's TTM says that JCY is losing some 34.443 million!

Which means..... JCY is very unlikely to even earn 44.9 million this fiscal year!

Think about it....

RHB said that if JCY could earn some 44.9 million, JCY should be valued as low as 22 sen.

Now? JCY it's very likely that JCY could not earn 10 million this fiscal year!!!

Yeah... and so how much do you reckon that JCY should be worth???

22 sen?

Or lower?
Some other comments.

1. What a shame! Such a performance from a billion dollar company. And this billion dollar company was listed only on Feb 2010. Yet another quality listing on Bursa Malaysia eh?

2. From the first posting on JCY: Regarding JCY International :  "JCY earned some 207 million for its fy 2009. CIMB says times are good in 2010, so JCY should earn some 359 million! And 2011, JCY earnings will be even more super. JCY should earn some 441 million by then!" -- Yes! CIMB had predicted that JCY could earn some 441 million for this fiscal year! .. currently JCY's TTM is a loss of 34.4 million!! How's this for being way off?

3. Same posting: Regarding JCY International.

peng01 said:

• How much money do JCY　raise in their IPO ?
  
  The total amount due to shareholder is 173mil, and they hav settle it in 9 months.
  Total loan 360mil, where 280mil is short term loan.
  
  But still able to give 80mil as dividen and buy equipment for 200mil last quater.
  
  Otak boss JCY rosak ke ?
  
  ............ you should wrote this article when jcy hit the high of 1.90, 阿弥陀佛。
  
  So, IPO rm750mil, all masuk pocket YKY investment,
  
  And jcy shareholder get rm80mil dividen angpow only, and this 80mil angpow paid is borrow from bank.

Putting this issue into current perspective.... how?

My reply back then.

Well, JCY had 'hoped' to raise some USD 350 million from its IPO.


See : So Many Cash Calls In Our Market

But JCY was not lucky. :P

It had to scaled back its IPO. ( I wonder why. :P )

JCY only managed to raise some 750 million.


JCY to slash IPO size on weak pricing

And to put your issue in an even better perspective, do refer this news clip  JCY set to be Southeast Asia’s largest tech IPO


Quote: "Interestingly, the IPO is expected to give a payout to major shareholder YKY Investment Ltd up to RM1.25bil based on the maximum retail price of RM2.00 per share, assuming it is at 5% discount to the placement price and the full over-allotment option is exercised.

The question floating around is: Why is the IPO an ‘offer for sale’ by 74.1% sole shareholder YKY Investments Ltd?"

Ahem!

And yeah... to make it more 'interesting'

For fy ending 30 Sep 2008, amount owing to shareholder is only 5.8 million. The following year, this amount balloons to 173.20 million! ( see page 75 of the JCY's pdf attachment posted on Bursa Malaysia. )

So How Now?

Exactly.

:)

Let me try something new.

This is an open post. Got an idea or stock tip to share?

Everyone who is willing to share their ideas and opinions please do post here.... :)


ps: 13845454760825339051 and 08674531928566826301 ... don't bother la.

Perisai And CIMB's Target Price Of 1.60

They keep telling the market the stock is good and the stock should be worth some 1.60.

But the stock is trading at  70.5 sen only.

Is this the big one? Is this the big 'value' stock to bet on?

Ah.. I am talking about Perisai, a stock blogged several times before

• 31 Mar 2011: Perisai: Life Is Too Damn Good!
• 31 Mar 2011: RHB Clarifies Its Statement On Perisai
• 31 Mar 2011: Perisai Asked To Explain In Details Its Purchase Of Garuda Energy
• 1 Apr 2011: Perisai's Reply To Bursa Query
• 1 Apr 2011: A Little Chat With Dali On Perisai
• 2 Apr 2011: Featured Post: Legg Mason Sold Every Single Share Of Perisai They Had Bought On 23 Mar 2011
• 3 Apr 2011: More On Perisai
• 4 Apr 2011: Why Perisai Is Rated So High By The Local Analysts?
• 5 Apr 2011: More Interesting Statement On Perisai

And here's the performance of Perisai since Mar 2011. ( Arrow indicates 31 Mar 2011 )

And this is how Perisai is doing on a one year time frame.

So they (CIMB Research) have been telling the market that Perisai is worth 1.60.

Does this price of 1.60 gets anchored into you??

Think about it.

When you look at Perisai the stock, does it becomes automatic for you that Perisai should be worth 1.60?

But... but .... butttttttttttttttt........ what about the reasoning behind the buy call?

What about how CIMB got the Target Price of 1.60?

Think about it...

On 23 June 2011, CIMB released the following report.

Target price raised to 1.60.

The numbers ...........

See the numbers???

Perisai had 10.3 million profit in fy 2010.

Perisai's earnings is then PROJECTED to grow to 46.9 Million in FY 2011, 90.4 Million in fy 2012 and 95.1 Million in fy 2013.

See the massive growth projected for Perisai?

Remember the hefty Target Price of 1.60 is based on the ability of Perisai to deliver such earnings.

Perisai reported its earnings last night. It made some 7.843 million, which represented an increase of 26% when compared against the fy 2010 numbers.

Of course it look impressive...

But.... but.... butttttttttttt...... as impressive as it is.... its current half year fy 2011 net earnings is only some 15.063 million.

Half year net earnings is only 15.063 million??!!!

And CIMB profjection for Perisai's fy 2011 is ................ 46.9 million!

Errr... how?

Isn't Perisai performing well below CIMB's expectation?

Or is CIMB's expectations of Perisai's earnings simply wild?

Well? Take your poison.

And for the record, here's Perisai most recent 4 quarters or trailing twelve months earnings.

How?

Do you think Perisai even make 95.3 million profit projected by CIMB come fy 2013???

Oh as it is... you can see the current half year EPS for Perisai is only some 2.23 sen.

Yes current half year EPS is only 2.23 sen.

And Perisai last traded at 70.5 sen.

But don't you worry, according to CIMB numbers game, they say Perisai is worth some 1.60.

KNM: Of Profit Guidance And Corporate Governance

From the posting: And So KNM Reported Its Earnings ..

• K C said...
  KNM's ebitda for the half year 2011 is 78 m, and if annualized, 156 m. That EBITda amounts to less than half of the management guidance. KNM is a "big head devil". If you look at its earnings, 6 month pretax earnings is 8 m, or just 0.8% of the turnover. What is its ROE? 0.5%! Having more than a billion total debt, it just needs the interest rate to go up by 100 basis points to wipe out any profit! Some more the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price. Do you want to invest in this type of company? KNM is too expensive at 50 sen is one of the most outrages investment understatements of the year

Some more the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price

Flashback March 2008: Some Musings on KNM Reports

In that posting, I pointed out that in RHB's report, RHB mentioned the following:

• Management is giving guidance that FY08-09 net earnings to be around rm450million and rm700 million respectively.

Let's compare KNM's guidance versus actual performance.

• fy 2008, KNM made 336.175 million. (KNM guided 450 million)
• fy 2009, KNM made 257.847 million. (KMM guided 700 million)

And judging from this set of quarterly earnings it looks like KNM will come up very short against its own guidance.

And like K C said..."the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price "

I totally agree!

Its simply shambolic that the management makes empty promises to the investing public!

 And this is not the first time KNM had done this!

So let me ask the gatekeepers a simple question : "Does this represent good corporate governance that a company management makes empty promises to deliver profits to the investing public?"

Think about it..... seriously.

Do you want every single company to make bold statements that they will make XYZ profit but only to fall terribly, terribly short?

Company X will say in their profit guidance 'I will make 20 million' in a briefing to the investing public.. What do you expect the analysts in the briefing to do? Do you expect to come out and say... 'Nah, company X is totally BS!' or 'In your dreams! Those profits are not achievable!'

No you don't!

The analysts would be obliged to value company X based on that 20 million.

And since the 20 million is already a very extremely optimistic guidance, the share price of Company X will have to be upgraded!

But then ... when.... fiscal year comes... that 20 million is no where to be seen!

Now let me ask... has company X made a mockery of the market?

Isn't K C spot on by saying "the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price "



Just to boost up the share price... the company management give the investing public false hope.

And so I ask... does this represent good corporate governance?

Or do you think KNM should be censored for making such wild profit guidance?

How?

I wonder if the gatekeepers are aware of what's happening.


And yeah the earnings again...

Can you see that the pretax profit is less than the after tax profit?

Why? KNM's got a nice fat tax benefit!!! ( Do read past postings )

And if we minus out the tax benefit, can we see how ridiculously small KNM's profits are????

( ps: K C, yeah the balance sheet is actually even weaker compared to its previous quarters. Loans increased, receivables increased a lot.... ) 

And So KNM Reported Its Earnings ..

KNM reported its earnings.

A 6 months net earnings of just '29.8 million'?

Remember this posting on March 2011? What I Think Of KNM's Earnings Guidance

Let me highlight again:

• KNM’s management had met with analysts earlier in the week and guided earnings before interest, tax, depreciation and amortisation (Ebitda) of RM363 million for its FY11 (ending Dec 31, 2011), while the Ebitda for FY12 is targeted at RM564 million.

Yup, direct from the management own mouth...

KNM would have an EBITDA of rm 363 million for fy 2011.

And looks like the management is 'pretty good with its guidance' once more!

Yup! Strikes again!

Last posting on KNM was on May 2011: KNM: Are you IN it to win IT? Or are you IN it to LOSE IT???