The Socialist Party of Malaysia (PSM) welcomes the request from the Public Accounts Committee (PAC) to establish a salary cap for the chief executive officers (CEOs) or managing directors of Federal Statutory Bodies (BBP). Complaints regarding the excessive salaries of CEOs or managing directors of statutory bodies are not new.

In 2018, the Prime Minister issued a directive to review the salaries and allowances of the chairpersons of statutory bodies, commissions, and GLCs after discovering that the executive chairman of MAVCOM was earning RM 85,000. More recently, Prime Minister Anwar Ibrahim reprimanded a government agency during the launch of the Guidelines on the Management and Governance of BBPs, which revealed that a chairperson was receiving an exorbitant salary of RM 79,000.

Such situations will only exacerbate the income gap and inequality among the people in our country. Imagine a scenario where the chairperson of a government statutory body is paid more than 50 times the monthly salary of an employee earning the minimum wage of RM1,500 in that organization, or where they earn the equivalent of a monthly executive salary of RM3,500 as their daily wage.

Setting a salary cap for an organization is not a new concept. It has been reported that China is planning to implement an annual salary cap for all state-backed financial companies. We can also observe that several sports industries have salary caps in place.

PSM suggests:

1. Introducing a salary cap and management pay structure linked to the minimum wage of the organization across all Statutory Bodies, Agencies, Commissions, and GLCs. The lowest-paid employees in the organization must have their salaries increased first before the CEO’s salary is raised.
   For instance, the highest salary in such an organization should not exceed 10 times the lowest salary. In this context, non-salary benefits such as bonuses, stock awards, and other perks must be taken into account.
2. The salaries and allowances of board members and chairpersons of all Federal & State Statutory Bodies, Commissions, and GLCs must be transparent and easily accessible for the public and workers to evaluate.

Government statutory bodies were established to enable the government to act more effectively and swiftly in providing services to the people and strengthening administration. They should not be used as platforms for professionals or politicians to amass wealth for themselves. It would be better for a worker earning a minimum or median wage to receive additional income rather than a board member or CEO. A regular worker would spend that additional income on basic needs, and the money would remain within the local economy, unlike a director who would merely hoard it for personal gain.

Gandipan
Central Committee Member
Socialist Party of Malaysia