Game point

Malaysian Business, Oct 1, 2006 by Gurmeet Kaur

THE small but lucrative gaming sector is the best paymaster in town, thanks to the vast amounts of money casino and number-forecast operators earn. It is not surprising that yet again, the highest- paid director of all Bursa Malaysia-listed companies is from Genting Bhd.

Other high-earning directors are from Berjaya Sports Toto Bhd and Magnum Corporation Bhd. Interestingly, in the last couple of years, the wages of directors from the gaming sector have been on the up and up.

The next best paymaster is banking, and it is a sector that is undergoing many changes. For example, as part of the industry's consolidation process, Southern Bank Bhd has been acquired by the Commerce group and is now re-branded as CIMB Bank Bhd.

The high payout in the banking sector is not surprising given the premium attached to specialised banking expertise. Most directors saw increases in their remuneration.

The highest-paid banker is Tan Sri Teh Hong Piow of Public Bank Bhd. He was paid RM29.32 million in 2005. The amount included the exercise of stock options. Teh's remuneration is head and shoulders above that of his peers.

Southern Bank's top director saw a huge pay rise which edged him to the remuneration band of RM13.45 million-RM13.5 million in 2005. This compares to RM3.5 million-RM4 million the year before. The rise in this bank's directors' pay was in line with the bank's doubling of its net profits in 2005.

But with the recent acquisition of Southern Bank by CIMB, the focus for 2006 will be on the latter banking group. Indeed, CIMB does not appear in this 2005 remuneration survey because of the consolidation exercise it has been undertaking.

Interestingly, RHB Capital Bhd's payout to its top director dropped significantly last year. The remuneration of its top director came into question in 2004 for supposedly being too excessive.

Meanwhile, the remuneration of Datuk Amirsham A Aziz, president and CEO of Malayan Banking Bhd (Maybank), stands out as being low compared to that of his counterparts, despite him helming the country's largest banking group.

Amirsham was paid RM1.78 million in 2005. It is understood that this is still on the high side of the pay scale of government-linked companies, indicating that the government sector still trails the private sector in remuneration of bankers. But because Maybank does compete on many fronts with the private sector, the question has arisen even in the past as to whether professional managers like Amirsham should be earning more than they are at present.

A quiet stock market appears to have taken a toll on the remuneration of directors in the stockbroking industry, with the exception of OSK Holdings Bhd whose top executive doubled his earnings from that of the previous year.

The plantation sector, buoyed by high CPO prices, has also seen increases in its directors' remuneration. A good example is the windfall enjoyed by IOI Corporation Bhd's top director. His remuneration, in the band of RM15.65 million-RM15.7 million, is way above the rest in the sector. Sime Darby Bhd, which has been rationalising its operations as part of the GLC revamp, decreased the payout to its top executive in line with a drop in its profits.

In oil and gas, despite high oil prices bolstering the bottom lines of companies in the sector, the remuneration of Dialog's top director was slashed to the band of RM1.4 million-RM1.45 million in 2005 from RM1.75 million-RM1.8 million the year before.

Some media executives have reason to cheer. Star Publications (M) Bhd has been upping the package to its top director the last couple of years for running the No. 1 English daily in the country. Its top executive earned between RM8.3 million-RM8.35 million in 2005. The previous year his remuneration was in the RM7.75 million-RM7.8 million band.

A big increase was given to Astro All Asia Networks Plc on the back of its increase in net profit. Astro's top director pocketed between RM2.1 million-RM2.15 million in 2005 as compared to RM400,001- RM1.05 million previously.

Similarly the property industry also dished out higher remuneration packages to their directors, with SP Setia Bhd and MK Land Bhd deserving a pat on the back for being among the handful of listed companies which have consistently been transparent in their disclosure of directors' remuneration.

In the construction sector, IJM Corporation Bhd made the cut with RM2.354 million paid to Datuk Goh Chye Koon, its CEO and deputy MD. In the consumer goods industry, the amount paid to British American Tobacco Bhd's MD Andrew Maclachlan Gray was slashed in 2005.