"SIAS raises questions about Hyflux CEO’s remuneration amid financial troubles
SINGAPORE: Despite reporting losses of S$115.6 million in 2017, troubled water treatment firm Hyflux spent about S$2.7 million on remuneration for its key executives, with CEO Olivia Lum receiving between S$750,000 and S$1 million in salary, benefits and bonuses.
In addition to this "large remuneration", Ms Lum also received more than S$60 million in dividends "in the time that shareholders and bond holders have seen their entire investment destroyed", according to the Securities Investors’ Association (Singapore) (SIAS).
Highlighting these points, SIAS asked why the Hyflux founder - which has 34 per cent ordinary shareholding in the company - did not contribute her gains to the restructuring process. The investor watchdog also asked if Ms Lum would have any role in the Hyflux group after the firm’s restructuring.
These were just two of more than 40 questions put to Ms Lum and the Hyflux board by the investor watchdog in a letter issued on Monday (Feb 11) and signed off by its President and CEO David Gerald.
"SIAS, representing the interests of the numerous stakeholders of various securities, is seriously concerned that many questions regarding the operations, valuation and accountability of the board of directors of Hyflux have not been addressed, so as to help securities holders make an informed decision, with respect to the restructuring," Mr Gerald said.
"In addition, (Ms Lum) has received significant salary, benefits and bonuses and earned between S$750,000 and S$1 million in 2017, a year in which Hyflux reported losses of S$115.6 million and a period which was five months prior to Hyflux Group filing for Court protection from creditors and when Hyflux has been losing huge amounts of cash and building projects,” Mr Gerald said in asking Hyflux to justify Ms Lum’s remuneration.
Mr Gerald also asked if many of the executives who “appear” to be shareholders are contributing anything to the restructuring.
The role of the Hyflux Group Remuneration Committee was also under scrutiny, as SIAS questioned its responsibilities and the basis as to how it established the remuneration paid to Hyflux executives in 2017 as “appropriate”.
Beyond clarifications on the decisions regarding remuneration, SIAS also raised queries over the firm’s financial operations.
“Hyflux Group has generated negative operating cashflow in every year since 2009. Was this highlighted to bondholders and shareholders? If so, in what form? Why did the Board continue to pay dividends, when the operating cashflow was negative and accumulate more debt during this time?”"
High time that the "elites" r held to accountability when bad things happened instead of being handsomely compensated n row away fr a sinking ship with most of the crews n passengers stuck on board!!
While one can't fault the S$60m dividend Ms Lum received, since other shareholders also got the same dividend; it does beg asking why won't the Company Board n Mgt NOT preserving cash for the sinking biz?
The official responses r forthcoming n i may venture to suggest the PR cookie cutter ones as follows
1. the Board is concerned that not giving dividend will cause shareholders to b unhappy n had nothing to do with the 60m Ms Lum will get!!;
and
2. the Board was under the impression that the Mgt got their acts together in turning the biz around. Also their compensations r not excessive compared to firms of similar size!
Let's see if i m right on these 2 questions tomorrow when we read the official responses!
In the meantime, i m just so glad that someone is trying to hold the elites accountable in Sgp!
Another one we want answer is: was the x-Group CEO of SMRT paid a big "resignation" package?
SINGAPORE: Despite reporting losses of S$115.6 million in 2017, troubled water treatment firm Hyflux spent about S$2.7 million on remuneration for its key executives, with CEO Olivia Lum receiving between S$750,000 and S$1 million in salary, benefits and bonuses.
In addition to this "large remuneration", Ms Lum also received more than S$60 million in dividends "in the time that shareholders and bond holders have seen their entire investment destroyed", according to the Securities Investors’ Association (Singapore) (SIAS).
Highlighting these points, SIAS asked why the Hyflux founder - which has 34 per cent ordinary shareholding in the company - did not contribute her gains to the restructuring process. The investor watchdog also asked if Ms Lum would have any role in the Hyflux group after the firm’s restructuring.
These were just two of more than 40 questions put to Ms Lum and the Hyflux board by the investor watchdog in a letter issued on Monday (Feb 11) and signed off by its President and CEO David Gerald.
"SIAS, representing the interests of the numerous stakeholders of various securities, is seriously concerned that many questions regarding the operations, valuation and accountability of the board of directors of Hyflux have not been addressed, so as to help securities holders make an informed decision, with respect to the restructuring," Mr Gerald said.
"In addition, (Ms Lum) has received significant salary, benefits and bonuses and earned between S$750,000 and S$1 million in 2017, a year in which Hyflux reported losses of S$115.6 million and a period which was five months prior to Hyflux Group filing for Court protection from creditors and when Hyflux has been losing huge amounts of cash and building projects,” Mr Gerald said in asking Hyflux to justify Ms Lum’s remuneration.
Mr Gerald also asked if many of the executives who “appear” to be shareholders are contributing anything to the restructuring.
The role of the Hyflux Group Remuneration Committee was also under scrutiny, as SIAS questioned its responsibilities and the basis as to how it established the remuneration paid to Hyflux executives in 2017 as “appropriate”.
Beyond clarifications on the decisions regarding remuneration, SIAS also raised queries over the firm’s financial operations.
“Hyflux Group has generated negative operating cashflow in every year since 2009. Was this highlighted to bondholders and shareholders? If so, in what form? Why did the Board continue to pay dividends, when the operating cashflow was negative and accumulate more debt during this time?”"
High time that the "elites" r held to accountability when bad things happened instead of being handsomely compensated n row away fr a sinking ship with most of the crews n passengers stuck on board!!
While one can't fault the S$60m dividend Ms Lum received, since other shareholders also got the same dividend; it does beg asking why won't the Company Board n Mgt NOT preserving cash for the sinking biz?
The official responses r forthcoming n i may venture to suggest the PR cookie cutter ones as follows
1. the Board is concerned that not giving dividend will cause shareholders to b unhappy n had nothing to do with the 60m Ms Lum will get!!;
and
2. the Board was under the impression that the Mgt got their acts together in turning the biz around. Also their compensations r not excessive compared to firms of similar size!
Let's see if i m right on these 2 questions tomorrow when we read the official responses!
In the meantime, i m just so glad that someone is trying to hold the elites accountable in Sgp!
Another one we want answer is: was the x-Group CEO of SMRT paid a big "resignation" package?
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