KUALA LUMPUR, May 6 — Finance Minister Lim Guan Eng has called upon the Securities Commission (SC) to look into fairer compensation for employees in well-performing companies for its Corporate Governance (CG) Monitor next year.
In his speech read out by political secretary Tony Pua at the launch of today’s Corporate Governance Monitor, Lim said Malaysia is behind in terms of employee compensation compared to countries such as Singapore and South Korea.
“If Malaysian companies perform, the contributions of their employees should be duly rewarded. Compensation of employees in Malaysia as a percentage of GDP stood at only 35.2 per cent in 2017 whereas countries such as Singapore and South Korea are well above 40 per cent.
“Hence corporate Malaysia needs to play its part to ensure that Malaysian workers earn a decent wage with good work environment.
“In this context, we look forward to the SC following up on its analysis of CEO remuneration with a review of key pay ratios and wage levels of employees in listed companies in the next year’s CG Monitor,” Lim said.
Part of the SC’s CG Monitor’s thematic review this year is on chief executive officer remuneration.
The finance minister said it was obvious from the data that some companies paid their chief executives well — as much 17 times more than the median, according to the report — despite only having reasonably average market capitalisation.
Lim reminded corporate Malaysia to steer their companies towards a more sustainable future by adopting sound, ethical, and legal governance as well as financial management policies including ensuring that pay is aligned with performance.
He also called for more large companies to adopt the practice of making the remuneration of their senior management transparent.
“I am pleased to note that a number of small and mid-cap companies have done very well by outnumbering the large companies when it comes to the adoption of certain practices; this includes disclosing the remuneration of members of senior management, which will help stakeholders evaluate pay and performance.
“I expect to see more companies, in particular, large companies adopting this practice this year,” said Lim.
He also encouraged the board of listed companies to establish a code of conduct and ethics that contain policies and procedures on anti-corruption.