‘BOARD DESERVES ONLY HALF OF FEES’

Key shareholder KPF says palm oil giant’s financial performance worrying

ONE of FGV Holdings Bhd’s key shareholders, Koperasi Permodalan Felda (KPF), said FGV directors should be paid only half of the proposed remuneration fees.

KPF representative Datuk Zakaria Arshad said it was a reasonable amount that would show the board was being fair to the staff and serious about helping FGV.

“It is best for FGV to tighten its

budget, especially the directors’ fees. FGV staff did not get any bonus and advance Hari Raya salary. If the directors’ remuneration is cut, it will boost staff morale in light of the recent service termination of senior staff,” he told the New Straits Times yesterday.

On Tuesday, key FGV shareholders voted against the directors’ pay packages in a gruelling five-hour meeting.

The shareholders were Federal Land Development Authority (Felda), KPF and Lembaga Tabung Angkatan Tentera (LTAT). Felda is FGV’s biggest shareholder with a 33.7 per cent stake, while KPF and LTAT own 5.25 and 1.25 per cent, respectively.

Zakaria said the directors could still get fees from attending board meetings and other perks. However, given the current tough period, they should not ask for similar fees as last year.

Based on FGV’s 2018 annual report, the fee payable to chairman Datuk Azhar Abdul Hamid was RM1.95 million. The total remuneration for the board was RM5.74 million.

Zakaria said the palm oil giant was losing money and it would not be feasible to pay hefty fees to the board members.

“As a responsible investor, I think KPF needs to see its money grow. That is our concern,” he said, adding that KPF had been struggling to pay dividend to its 240,000 members.

Zakaria said FGV’s financial performance was the issue.

He said although the FGV directors had sacrificed their time to turn around the company, they should also look at its overall performance financially.

Zakaria said the cooperative had been listening to FGV’s directors for the past 1½ years.

“But the result is worsening. As an investor, we are worried as 70 per cent of the company’s business comes from palm oil.

“If the crude palm oil (CPO) price does not go up to between RM2,300 and RM2,400 per tonne, it would be difficult for them. Currently, CPO is traded at around RM2,000 per tonne.”

Meanwhile, Deputy Economic Affairs Minister Dr Mohd Radzi Md Jidin said the FGV board’s remuneration issue could be solved through discussions.

He said there must be a reason Felda and other shareholders voted against the resolutions related to the pay packages.

FGV was listed on Bursa Malaysia’s Main Board in mid2012, and it was the world’s second-largest initial public offering (IPO) after Facebook that year.

The IPO reference price was RM4.55 per share. Upon listing, it was traded as high as RM5.46.

However, the stock plunged to about 63 sen per share on December 14 last year, its lowest level.

Yesterday, FGV closed 0.87 per cent lower at RM1.14.