|Sime to file appropriate action on bloggers?|
Sime Darby is in the blogs again, this time over a proposed resolution for the coming AGM to approve share schemes for the employees and the bosses.
1. GLC bosses and their pay: A rewarding election issue for the Opposition
My first thought when I read Big Dog's posting was: "Ah, and the PRU13 is just around the corner!" Because they are government-linked, as their name suggests, GLCs are a favorite punching bag of the Opposition. Especially so during election season. This one on Sime Darby is going to be a big and easy target for them in the run-up to the 13th General Election.
Forget about the scheme being great for the 100,000 employees of Sime Darby. The Opposition doesn't care. Their focus will be on:
The fact that Sime Darby wishes to reward a. its CEO and b. someone related to a Director
The fact that the CEO has been around hardly long enough
The fact that Sime Darby had just exited from a very rough patch that involved millions of RM in unexplained losses and alleged mismanagement.
And the fact that those rough patches have resulted in at least a lawsuit filed by the former CEO against the Board of Directors, which is still on-going
Timing is everything. Just the other day, PAS' Mahfuz Omar raised hell in Parliament over Tabung Haji CEO Ismee Ismail's pay and perks. The guy's RM70k a month salary in 2011 has been raised to RM85k from this year. He's overpaid, Mahfuz said, comparing Tabung Haji's size to EPF's and Ismee's pay to EPF CEO's pay (RM50,000 a month). Read Mahfuz: Explain Tabung Haji CEO's pay packet.
In the run-up to PRU12 in March 2008, the pay and perks of GLC bosses became an election issue to win a war of perception that Abdullah Badawi's regime was CEOs-friendly but did not really give two hoots about the general working population and, therefore, wasn't that people-friendly. We can expect more intensified attacks in the run up to PRU13.
2. Sime Darby's side of the story:
For Immediate Release Friday, 19 October 2012
False and erroneous allegations made against the Chairman, Board of Directors and senior management of Sime Darby
Sime Darby is responding to certain allegations and accusations that have recently been posted on certain blogs with regard to a proposed long term incentive plan for eligible employees of the Group. The information contained in these blogs is wrong and thus the opinions posted are not founded on fact. The proposed performance-based employee share scheme is still subject to the approval of shareholders at general meeting.
The two blogs and the comments posted have caused embarrassment to the Chairman, Board of Directors and the senior management of Sime Darby. The company takes a serious view of these baseless accusations and the inferences therein and will take appropriate action to protect the reputation of the organization.
An official from Sime Darby has contacted one of the bloggers and informed him of his mistakes. Despite having notified him of his errors the previous day, he has yet to correct the offending post or remove it, which suggests that his intentions are malicious, vexatious and mischievous. The post has attracted undue attention and perpetuated his mistaken assumptions.
A summary of the erroneous statements and the actual facts is listed below:
No. Accusations Actual Facts 1. EGM on 8 Nov to approve a special ‘grant for selected employees’ – in the form of free shares Sime Darby Bhd will hold an EGM on 8 November 2012 to seek approval for the performance-based employee share scheme – a scheme that aims to drive long term sustainable performance of the Group as well as to attract, retain and motivate employees based on their performance and the fulfillment of certain performance conditions and targets. The fulfillment of these targets will enhance total shareholders’ returns and the overall performance of the company which will benefit all stakeholders. 2. The reward is not to the 100,000 Sime Darby staff worldwide but only to two individuals. For employees working in Malaysia, executives of all grades including the executive director will be eligible to participate in the proposed scheme. For those employees based outside of Malaysia, executives of job grade VP II and above will be eligible to participate in the proposed scheme. 3. Only two employees have been nominated for the scheme, Dato’ Bakke for 3 million shares and Nur Tania Yusof for 200,000 shares Under the listing requirements, separate resolutions are required to be passed by shareholders to approve the grants of shares to Dato’ Bakke as the executive Director and Nur Tania being a person connected to a Director of Sime Darby Berhad. However all executives of VP II and above are eligible to participate in the scheme. It is wrong to suggest that these two individuals are the only two who will benefit from the proposed scheme. 4. The practise of giving away ‘free shares’ is very odd Sime Darby is not the first organization in Malaysia to implement such a performance-based share scheme. Other companies like Axiata, Bursa Malaysia and Maybank have implemented similar schemes earlier. 5. Why is Sime Darby’s Board of Directors at liberty to determine which senior management or employees are entitled for these ‘free shares’ at a time when the public is demanding for greater accountability? The scheme envisages the establishment of a Board committee to implement and administer the proposed scheme. This is standard practice in all organisations. It would be ludicrous to expect external parties to determine performance and rewards.
· In the case of the President and Chief Executive, the proposed performance-based employee share scheme allows for the granting of a maximum of 3 million shares over the 10-year scheme period. This number of shares will be vested on a staggered basis and only in the event of exceptional performance both at individual and enterprise level for the 10 years and subject to fulfillment of stringent performance-based conditions. The shares will only be vested in the grantee three years after the grant, subject to vesting conditions. These criteria will apply to all eligible grantees.
· The Board has built in safeguards into the process that will ensure that the interests of the company and its shareholders are at all times safeguarded.
The blogs posted on the performance-based employee share scheme are misinformed and reflect the lack of appreciation and understanding of industry practices on performance-based reward schemes.
3. Click on the links to read the offending postings.
a. SANTA MUSA IS COMING TO TOWN by Big Dog
b. WHAT IS SANTA MUSA UP TO? by A Voice
Big Dog has carried a link to Sime Darby's clarification and I believe A Voice is also giving Sime Darby the right to a reply. That's the appropriate thing to do.
Since 2006, the year of the "world's biggers plantation companies' merger" that gave birth to Sime Darby, the two bloggers have been blogging religiously about the transnational corporation. Their records speak for themselves.