UPDATED Tenaga’s employees’ benefits have increased by 81 per cent over the last two years, compared with only a 14 per cent rise in wages and salaries. That’s what a quick look at its financial statements reveals.
The Khazanah head honcho had earlier defended the high salaries paid to the top officials in GLCs in this excerpt from a report in The Star today:
His comments, as reported by Bernama, were in response to comments in blogs that Tenaga Nasional Bhd (TNB) CEO Datuk Seri Che Khalib Mohamad Noh and CFO Datuk Izzadin Idris were getting a huge (an unconfirmed 100%) salary increase.
The timing of the proposed salary increment has jolted many Malaysians now experiencing a strain in their monthly incomes after steep rises in fuel, energy and escalating food prices.
Quoting Khazanah’s Blue Book, which details executive compensation and institutionalises salaries, Azman said: “We cannot pay too low, we shouldn’t pay too high but we have to pay enough, and we have to pay fairly”.
Based on the company’s latest annual report, Che Khalib’s total remuneration last year was RM1.1mil, of which RM600,000 was his annual salary.
Azman, the Khazanah MD, said:
“The average Malaysian company pays three months’ bonus. What we are saying is that we will pay more, as long as the company and shareholders make much more than that.
“That means value must be created,” he told reporters after attending the opening ceremony of the MIT Sloan Global Entrepreneurship Lab Programme workshop facilitated by Khazanah.
“That is a very important point. It is performance-based, incentive-driven and self-funding. We are not taking money away from anybody but creating more value,” he added.
Err, how can he say they are not taking money from anybody when Tenaga has just raised tariffs and the public have to cough up more?
For the financial year 2007, Tenaga, the privatised government-linked electricity firm, made a profit of RM4.1 billion, which includes a forex translation gain of RM486 million.
Let’s have a look at Tenaga’s staff costs for FY2007:
Wages, salaries and bonuses 1,429.1
Defined contribution retirement plan 152.0
Retirement benefit plan 249.0
Retirement medical plan 400.2
Employees’ Share Option Scheme II 35.7 0
Other employee benefits 126.1
So we can see that the retirement plans and other employee benefits add up to a whopping RM963 million. This excludes wages, salaries and bonuses. (Does this include EPF? How much of these retirement plans are for top management?)
Anyway, with total employees of 28,822:
- wages, salaries and bonuses work out to RM49,583 for the year for each employee or RM4,132 per month.
- employees’ benefits work out to RM33,412 for the year per employee.
- total staff costs work out to RM6,916 per month for each employee.
Compare that to FY2005:
Net profit for the financial year 2005 was RM1.28 billion
And the staff costs in FY2005:
Wages, salaries and bonuses 1,255.0
Defined contribution retirement plan 129.7
Retirement benefit plan 192.1
Retirement medical plan 94.7
Other employee benefits 116.4
If we add up the retirement plans and other benefits, it comes up to RM533 million.
Anyway, with total employees of 27,727 back then:
- wages, salaries and bonuses work out to RM45,263 per year for each employee or RM3,772 per month.
- employees’ benefits work out to RM19,219 for the year per employee.
- total staff costs work out to RM5,373 per month per employee.
That means employee benefits have risen from RM533 million to RM963 million within two years, a rise of 81 per cent (or 74 per cent on a per employee basis)! Creating “value added” for TNB, eh?
However salary, wages and bonuses in terms of value increased by less than 14 per cent (or 10 per cent on a per employee basis) during the same period.
Please explain why employee benefits have risen so much faster. I wouldn’t begrudge TNB’s rank-and-file workers a higher amount of benefits, but has the bulk of the increase really gone to them – or to top management?
Can someone tell me how much the bottom-rung TNB employees earn? And what kind of benefits they get? And then we can see how far they are below these average figures….