KUALA LUMPUR: The assurance from FGV Holdings Bhd that it has been progressing well failed to excite shareholders at the company’s five-hour long AGM today, which instead saw the rejection of resolutions pertaining to its directors’ remuneration .
After the release of its second letter to shareholders detailing the turnaround plan just days ago, the loss-making plantation giant’s board of directors was grilled by shareholders over remuneration.
Some 64.4% of the shareholders at the AGM, led by Felda, Koperasi Permodalan Felda (KPF) and the Armed Forces Fund Board (LTAT), voted against resolutions relating to its directors’ remuneration.
The resolutions include directors’ fees amounting to RM2.55 million in respect of the financial year ended Dec 31, 2018; the payment of a portion of directors’ fees payable to the non-executive directors up to RM1.18 million from June 26, 2019 until the next AGM to be held in 2020; the payment of benefits payable from June 26 until the next AGM to be held in 2020.
The resolution to grant authority to the directors to allot and issue shares pursuant to Section 75 of the Companies Act, 2016 was also rejected.
“Shareholders’ message to us is that we want you to work but we don’t want to pay you,” FGV chairman Datuk Wira Azhar Abdul Hamid told a press conference after its AGM.
He revealed that institutional investor Employees Provident Fund (EPF) had raised concerns regarding the board’s remuneration, particularly his position, to which he volunteered to waive his fees with hopes that the resolutions regarding the remuneration would be passed.
However, the resolutions were blocked by Felda, KPF and LTAT which own 33.7%, 5% and 1.25% stake in FGV, respectively. The EPF, however did not reject the proposed resolutions on remuneration, according to Azhar.
Other resolutions such as the re-election of directors were passed.
Having just concluded the AGM, FGV’s board of directors is still contemplating its next move. Azhar did not discount the possibility of the board continuing their roles “for free”.
He said that in corporate Malaysia, FGV’s position is unique as being a board member of FGV is not the same as being a board member of a company that is doing well that could execute investment strategy and has a lot of cash in hand.
“The current board is not there for the directors’ fee but is a board that came in with eyes open and full understanding of FGV. We have actually volunteered to go through the hardship of turning around FGV.”
“In making any decision, it won’t be just about the fees but also the journey we’re trying to craft out with FGV,” he added.
FGV reported a net loss of RM3.37 million for the first quarter ended March 31, 2019 compared with a net profit of RM1.13 million a year ago.
Meanwhile, Azhar said there has been no formal discussion or renegotiation of FGV’s land lease agreement (LLA) with Felda as touched in the shareholders’ letter earlier. “What was outlined in the letter was the status quo in regard to the LLA. As chairman, I have to look at all possibilities and evaluate the impact on FGV.”
