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Finding the balance on directors’ pay

Finding the balance on directors’ pay


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Finding the balance on directors’ pay

A recent KPMG Malaysia report entitled KPMG Report on non-Executive Directors’ Remuneraton 2017 indicates that the remuneration levels for non-executive directors averages at about RM162,000. This is a 33% increase from the RM122,000 recorded in the 2013 edition of the report and this in turn was 37% higher from the RM89,000 average seen in first version of this eport back in 2009.

KPMG Malaysia managing partner Datuk Johan Idris noted several factors that has influenced the steady rise in remuneration packages.

“The rising expectations, responsibilities and commitment assumed by a non-executive director have increased their remuneration and these are further accelerated against the intensifying demands of globalization, emergence of novel technologies and relentless pressure on companies to innovate,” he added.

KPMG Malaysia executive director and head of risk consulting Mohd Khaidzir Shahari  emphasized that the role of a non-executive director is to provide checks and balances to management.

“The reward should not be based on performance, [if not] the decision-making will no longer be independent and they might favour the decisions made by the executives,” he rationalized.

Read full article here.


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