Singapore Fraser and Neave puts chairman pay to vote
SINGAPORE, Jan 9 (Reuters) - Singapore beer-to-property conglomerate Fraser and Neave (F&N) (FRNM.SI) said it will put a controversial S$1.25 million ($873,500) pay arrangement with its new chairman to a shareholder vote, for more transparency.
Lee Hsien Yang, former CEO of Singapore Telecommunications (STEL.SI), was appointed F&N chairman last October with a salary of S$250,000 plus S$1 million a year in consultancy fees, which raised concerns among investors over conflict of interest.
The company in its 2007 annual report, released on Tuesday, has proposed to pay Lee a salary of S$1.25 million a year in total, subject to a shareholder vote on Jan 31.
"It's an unusual but refreshing move for them to consult shareholders. Hopefully F&N can also keep shareholders informed of the exact nature of Lee's duties," said David Gerald, president of the Securities Investors Association of Singapore.
Gerald noted that typically, a chairman's pay is decided by a renumeration committee or within the board of directors.
"We will leave it to shareholders to decide what is the most appropriate renumeration. At the end of the day, it's more to do with giving greater transparency and accountability," a company spokesman said.
Lee, younger brother of Singapore's prime minister Lee Hsien Loong, is overseeing company affairs after former F&N deputy chairman and chief executive Han Cheng Fong left in October over differences of opinion with the company's board.
In November, F&N reported a better-than-expected 18.5 percent rise in net profit to S$378.6 million for the fiscal year ending September 2007, boosted by better margins and rents in its property division.
In his first chairman's message, published in F&N's annual report, Lee said the company's new financial year "is fraught with uncertainties arising from the U.S. subprime mortgage issue and the high price of crude oil.
"The group will need to address the challenges of more cautious consumer spending and higher costs of doing business. However, economic growth in Asia is expected to continue albeit at a slower rate," Lee said.
F&N's share price has risen 20.6 percent to S$5.50 over the last 12 months, but is off a S$6.40 record high achieved in May last year. (Reporting by Daryl Loo; Editing by Ovais Subhani)
