KUALA LUMPUR: Median remuneration of listed firms' non-executive directors across sectors in Malaysia stand at RM113,750 with financial services having the highest remuneration.
This is according to the Malaysian Board and Senior Management Remuneration Practices Report published by the Institute of Corporate Directors Malaysia (ICDM).
ICDM noted that 78 per cent of survey respondents feel that the non-executive directors were paid adequately for their responsibilities.
"Another 89 per cent believe their policies and procedures appropriately reflect the roles and responsibilities, the challenge in right-sizing remuneration requires timely and accurate market industry baseline and benchmarks.
"This covers benchmarking against peer group, tome commitment, scope and complexity, company size and profitability, onerous responsibilities and qualification. There is no one size fits all," ICDM president and chief executive officer (CEO) Michele Kythe Lim said at a press briefing on the report today.
The report summarised the review of 176 of top 300 public listed companies in the country and 193 completed survey responses relating to their respective board and senior management remuneration practices.
The observations took place from Nov 1 2022 until Feb 28 this year.
As for CEOs and managing directors of the companies polled, the report revealed that their remuneration increases parallel with the rise in the company's market capitalisation and net profit.
It noted 85 per cent of respondents felt that CEOs' remuneration in Malaysia are reflective of the company's performance.
Lim said there could be potential for an upside in the remuneration for non-executive directors as there is a huge pay gaps between them and the executive directors of a company.
"There could be room for an upside looking at the responsibility of non-executive directors but again there are various other factors that come into play as well for example where the company is in, the industry.
"We do not want to overpay as well but there needs to be a certain baseline to know for your industry and where your company is in terms of maturity level etc and skillset, among others," she added.
On transparency reporting, she said Bursa Malaysia could be able to assist companies in formulating a standardise requirement for their remuneration aspects.
"When we look at data such as board fees, there may not be similar elements within that remuneration pool.
"So if we can standardise that, I guess Bursa Malaysia can help companies as well to standardise where they report and how they report it.
"So when they disclose these information, we can compare apple to apple and it is important because then you can benchmark," said Lim.
