I wrote this article over 3 years ago: When CEO’s salaries get too high. Frankly, a CEO getting paid RM20 million versus RM15 million? The difference is not huge because the usual things he could buy with RM20 million or RM15 million is well, nearly everything. That difference of RM5 million, even if divided to 250 lower ranked staffs meant everyone gets RM20,000 per year and this is HUGE for them based on their salaries. Property wise, the difference could be a high-rise unit of 1,500 sq ft versus a high-rise unit of 800 sq ft. Well, recently, there was another article about how the CEOs’ salaries in Malaysia is getting too high when compared to the average worker.
Article in humanresourcesonline.net here. Research by SmallBusinessPrices.co.uk shows that the average CEO’s annual salary is £5.2 million (RM28 million) compared to the average worker’s annual salary of £32,489 (RM176,000) globally. In United States, the gap is widest as the CEO is earning a pay which is 354 times the average employee’s salary. This is then followed by CEOs in Switzerland, Germany, and Spain taking home salaries that are worth 148 times, 147 times, and 127 times respectively compared to the average worker salaries in these countries.
Here in Asia, the average CEO salaries in Singapore, Malaysia and Hong Kong are pegged at 74 times, 148 times, and 102 times the average salaries of workers respectively. The difference are different in different sectors. Media sector for example has the CEO earning 571 times higher. Construction is 272 times higher and general retailing as well as travel and leisure is 187 times higher. The best industry seems to be in the technology where the CEOs earn just 52 times higher than the employees. Nevertheless, in numbers, a pay gap of 52 times meant that a CEO needs just ONE WEEK to earn an employee’s yearly income. Read more here: Article in humanresourcesonline.net here.
As just another working professional, I also hope that the disparity in income could be lower because a small change in the CEO’s pay is a huge change for many of the lower income employees in the organisation. Perhaps we could quote what Finance Minister Lim Guan Eng said recently, “If Malaysian companies perform, the contributions of their employees should be duly rewarded. Compensation of employees in Malaysia as a percentage of GDP stood at only 35.2 per cent in 2017 whereas countries such as Singapore and South Korea are well above 40 per cent. Hence corporate Malaysia needs to play its part to ensure that Malaysian workers earn a decent wage with good work environment.” Full article Article in malaymail.com here. Here’s hoping that when I write about this again 3 years later, we have positive changes yeah.
Article written and edited by Charles. News article summarised by Dina Batrisyia.
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