Sunrise Gets Shareholders’ Approval on Directors’ Compensation

Executive directors of Sunrise Berhad received shareholder backing in support of getting the input from shareholders on directors’ compensation. Said to be an unprecedented initiative from a Bursa Malaysia-listed company, a “say-on-pay” proposal was discussed during a Sunrise AGM in late October. During the meeting, a non-binding advisory vote was taken to gauge sentiment on whether its directors’ salaries were justified.

According to Sunrise executive chairman, Tong Kooi Ong, this new initiative would promote greater accountability and transparency. The following questions were posed, followed with the shareholders’ responses (shareholders present and voted):

• Is the current compensation for the executive directors fair?
  • Yes – 53.06%
  • No – 46.94%
• Are the executive directors underpaid?
  • Yes – 66.67%
  • No – 33.33%
• Would shareholders support a ten per cent increase in the executive directors’ compensation in the next year?
  • Yes – 56.12%
  • No – 43.88%

According to a news report, Tong said the “say-on-pay” proposal was “good” because it enabled shareholders to decide on the level of risk a company should take. He was quoted as saying:

We did it because we wanted to set a precedent, and I am hoping that this becomes a trend. We believe that there is a need for transparency. I think it will become worldwide soon.

Tong was of the opinion that the “say-on-pay” proposal could result in a more efficient capital market in terms of resource allocation and risk taking. “Say-on-pay” generally is an opportunity for shareholders to vote on directors’ compensation. Unless it is required by law, it is usually carried out in the form of a non-binding advisory shareholders vote. Malaysia has no legal requirements on “say-on-pay”.◊

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