By Khairie Hisyam
State investment fund 1Malaysia Development Bhd (1MDB) saw its employee costs grow by 40% year-on-year in the financial year ended March 2014 (FY14) despite directors seeing their pay trimmed over the same period.
Overall, the 40% increase in wages, bonuses and salaries was driven by a one-off termination benefit for a former Jimah Energy Ventures Sdn Bhd, according to 1MDB’s audited annual financial statements, which amounted to RM22 million.
Jimah Energy Ventures is a 75% subsidiary of 1MDB, a stake it acquired in January this year for RM1.2 billion. The company’s main assets are two coal-fired power plants in the Jimah district in Port Dickson, Negeri Sembilan that was previously controlled by the Negeri Sembilan royal family.
In FY14, 1MDB paid a total of RM140.96 million in employee benefits compared to RM106.84 million in FY13.
Of that figure, some RM123.69 million in FY14 was for wages, bonuses and salaries, 40% more than RM88.39 million a year prior. Similarly 1MDB’s contributions to the Employees Provident Fund (EPF) also rose by 40% year-on-year in FY14 to RM12.63 million compared to RM9.07 million the previous year.
Employee benefits encompass wages, bonuses and salaries; contributions to the EPF; and other personnel-related expenses. The latter dropped drastically this year for 1MDB, coming in at RM4.63 million compared to RM9.37 million in FY13.
Taking away the one-off compensation, 1MDB paid less to its key management personnel — executive and non-executive directors — in FY14 compared to FY13. For FY14, total benefits for key management personnel came to RM4.95 million compared to RM5.99 million in FY13.
Of the RM4.95 million, RM2.58 million were for executive directors while the remaining RM2.36 million went to non-executive directors.
According to Companies Commission of Malaysia (CCM) data, 1MDB’s directors are chairman Lodin Wok Kamaruddin; Mohd Hazem Abdul Rahman; Shahrol Azral Ibrahim Halmi; Ismee Ismail; Ong Gim Huat; and Ashvin J. Valiram.
Of the group, Mohd Hazem who is 1MDB managing director and chief executive officer is the only executive director of the investment fund.
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