No one would respond to news of getting their pay cut positively, much less volunteer to have their pay cut. But that’s what the Genting CEO has just done! Offering to cut his own salary by 20%, Tan Sri Lim Kok Thay will now earn less by at least RM18.7 million.
Why is he docking his own pay?
Apparently, Genting is making less profit, and struggling with higher gaming taxes, implemented last November. As of 2019’s first quarter (31st March), Genting Malaysia’s profit had dropped by 26% to RM253.1 million. Therefore, Lim’s voluntary pay cut is part of an initiative to reduce the company’s costs. He announced this decision during the group’s AGM on 19th June to enthusiastic cheers and applause, though there were some who thought that he should have taken a 50% cut instead.
Facts & Figures
Even after the pay cut, it is believed that the cut would hardly make a dent in Lim’s fortune. As the best paid CEO of all Bursa-listed companies in 2018, Lim took home RM183.07 million based on Genting Berhad’s annual report disclosures. It is unclear if the pay cut refers to his remuneration at the Genting Group level, or its subsidiary Genting Malaysia. With the 20% pay cut, reduction amounts to an estimation of RM36.61 million at the group level, and an estimation of RM18.7 million at the Genting Malaysia level. Lim is also the seventh richest person in Malaysia, according to Forbes.
Effective November 2018, there has been an increase in duties. Gross gaming revenue duties increased to 35% from 25%, and gaming machine duties were up 30% from 20%. Furthermore, the Finance Ministry also increased annual license fees to RM150 million, as well as annual machine dealer’s license to RM50,000. All these impacted performance and profit, and the group is continuing to review capital expenditure requirements and rationalise operating cost structure.