Date of publication: Jan 8, 2014
Section heading: Business Times
Page number: 006
KUALA LUMPUR: AN annual six per cent increase in salaries of employees has been suggested by KPMG Malaysia, in light of the implementation of the goods and services tax (GST) in April next year.
Its newly appointed managing partner Johan Idris urged both the public and private sectors to gradually increase the salaries of their employees to help them cope with the high living cost.
"Six per cent would be a good example to begin with, especially after the GST implementation, new electric tariffs, petrol subsidy cuts and new toll rates," Bernama reported him as saying after the launch of the second-edition publication of the "Study on Non-Executive Directors 2013 - Profile and Pay", here, yesterday.
Johan said the GST implementation is inevitable as Malaysia is a developing country.
Meanwhile, KPMG Malaysia has collaborated with the Audit Committee Institute Malaysia to launch the second-edition publication that offers insights into the profile and remuneration of non-executive directors (NEDs) in Malaysia's public-listed companies.
The study revealed that based on the top 300 market-capitalised companies on Bursa Malaysia as at June 30 2013, the average remuneration for NEDs in Malaysia has increased 37 per cent to RM122,000 from RM89,000 per year in the 2009 study.
NEDs in companies ranked 201st to 300th on Bursa Malaysia showed the largest increase, with remuneration doubling to RM65,000 from RM32,000 per year.
Johan said the publication is primarily a remuneration study on NEDs in listed issuers.
"However, the results should not be viewed or discussed in isolation without considering the multitude of changes in the corporate landscape.
"With the introduction of the Financial Services Act 2013 and amendments to the Capital Markets and Services Act 2007, penalties on directors for failing in their fiduciary duties have increased," he said.
He pointed out that the financial services sector emerged as top payers in the study, with each NED receiving an average of RM239,000 per year.
The top payers in the industry comprise local financial institutions while foreign-owned financial institutions pay much less.
The study also showed that 11 per cent of the 1,821 NEDs surveyed were female, a significant improvement from only six per cent in the 2009 study.
The increase in the number of female NEDs somewhat resonates with the government's target to have women holding 30 per cent of decision-making positions in Malaysia by 2016, a move first mooted in 2011, said Johan.
KPMG Audit Committee Institute chairman Peter Ho said the study found that a vast majority of NEDs in Malaysia were equipped with adequate levels of qualifications, which enabled them to serve effectively.
The study also revealed that NEDs today are required to contribute to the development of corporate strategy, monitor management performance and ensure the accuracy of financial information.
"The role of NEDs has greatly been redefined in terms of responsibility and contributions, especially with the extra scrutiny from regulatory parties as well as internally. As a result, we believe the time has come to examine the merits and contributions of NEDs.
"We view this as an inevitable but positive step towards strengthening the role of NEDs," said Ho.
Conducted over six months, KPMG Malaysia's ACI study surveyed 1,821 NEDs from the top 300 market-capitalised companies across all industries on Bursa Malaysia.