Hoa Phat shareholders 'shocked' by leaders' salaries

With the remuneration for each board member being around more than 300 million VND per month, some shareholders say it is too high compared to many businesses of similar size.

The allocation of 35 billion VND to pay remuneration to the Board of Directors is one of the contents approved by the General Meeting of Shareholders of Hoa Phat Group (Stock Code: HPG) at the annual meeting this morning (March 31) in Hanoi.

Hoa Phat's Board of Directors has 10 members, but one member has resigned since August 2015. Accordingly, each member receives a salary of about 3.9 billion VND, equivalent to an average of more than 300 million VND per month.The Board of Directors (consisting of 36 people) alone received 5% of the bonus fund from the portion exceeding the annual plan, equivalent to 13 billion VND.

Mr. Tran Dinh Long suggested that this be the last time the congress talks about remuneration and salary.

Some shareholders believe that such remuneration is too large compared to businesses of similar size or in the same industry.

"I also know that the remuneration of some large banks is only about 0.35% of after-tax profit. Or compare it with the remuneration of Refrigeration Electrical Engineering Company (REE), which has high capital and high profit but the remuneration is 3.4 billion. Of course, the above remuneration in the companies also includes concurrent positions, but I still cannot explain it in comparison. I really feel a bit shocked," said a female shareholder.

Mr. Tran Dinh Long, Chairman of the Board of Directors of Hoa Phat, said that with a revenue scale of over one billion USD, the number of enterprises in the market is not much. However, there are few enterprises like Hoa Phat that every year both expand investment and pay cash dividends to shareholders.

"There are businesses with grand plans but no cash for shareholders. I still think that the management board should be commended. Rarely does a company invest and withdraw thousands of billions to pay dividends. Such a remuneration level is both high and low. A remuneration of 35 billion means we make 3,500 billion, but if we made 5 billion, it would still be very low," Mr. Long commented.

Regarding salaries and bonuses for the executive board, Mr. Long also said it was difficult to compare."With the scale of Hoa Phat, it is difficult to find someone with a salary of less than 300 million a month for a General Director. However, Mr. Duong's salary (General Director Tran Tuan Duong) is only 70 million a month before tax. I am really ashamed to say this because the salary is too low. I would like to say again that this will be the last time we talk about remuneration and salary," said Mr. Long.

Also at the Congress this morning, leadersHoa Phat said it achieved revenue of VND27,864 billion and after-tax profit of VND3,504 billion in 2015.Many shareholders also expressed concerns about the cautiousness in Hoa Phat's 2016 business plan when the profit target is only 90% of the above-mentioned implementation level of 3,200 billion VND.

"The 2016 plan is only 90% of last year's. Of course, the report pointed out some difficulties in the market but there are also many more favorable points, especially when the real estate market is improving. Should we set a growth rate compared to last year to be excited?", a shareholder emphasized.

Mr. Tran Dinh Long said that everyone wants high profits. But that is the eternal conflict between the owners and the management board."The time to develop the plan was at the end of 2015, in the context of the prices of basic raw materials such as oil, iron ore... all falling. In which, steel products, which account for 80% of the group's revenue, also decreased in price by 30%. The demand for iron and steel decreased, so profits also decreased," said Mr. Long.

The Chairman of Hoa Phat also said that the initial construction plan profit was only 2,500 billion VND but was later adjusted to 3,200 billion.

"I am also a shareholder, I also want the most profit, my desire is no less than other shareholders in terms of revenue and profit. It is easy for us to sit here and talk, but I think we have to share with the operator. I only have one commitment: I will do my best, regardless of day or night," Mr. Long emphasized.

According to VNE