Senior manager salaries in GLCs should commensurate with responsibilities
KUALA LUMPUR: In order to run government-linked companies (GLCs) professionally, their senior manager salaries should not be set above or below market rates, instead they should be competitive in line with the challenges and responsibilities tasked in managing businesses of similar importance and size.
Assistant Professor of Management at Asia School of Business Dr Renato Lima de Oliveira said Malaysia has worldclass companies that require top talents and the GLCs would have to offer competitive salaries in order to recruit and retain them.
“If you don’t offer competitive salaries, you might end up without the right mix of people running top companies: you will get those who could not get a job elsewhere because they are not top talents or those who are driven by a political agenda, which may conflict with good management,” he told Bernama in an email interview recently.
de Oliveira noted that the salaries would vary from company to company but such principle could guide a review of the top management of GLCs to make sure the companies were able to attract top talents with remuneration in line with equivalent positions in the private sector and give managers independence from political pressure.
He was asked to comment on Prime Minister Tun Dr Mahathir Mohamad’s warning that the days of top executives at the country’s GLCs drawing fat salaries regardless of their companies’ performance were over.
The premier had said that in the past, the government found it convenient to place its supporters in GLCs where these executives got a good income, and this resulted the businesses had a lot of people who were non-professionals and unfamiliar with business, thus defeating the whole purpose.
Citing an example, de Oliveira said aspiring politicians might be willing to run companies with below market salaries for a comparable position in the private sector in order to get public exposure and build connections, but investment decisions for political gains could come into conflict with what was best for the sustainability of the companies.