‘Directors paid in line with industry’

KUALA LUMPUR: The fees paid to directors of the Human Resources Development Fund (HRDF) are within industry standards and do not come from levy payments submitted by employers.

The entire levy payment collected is used to upskill and train employees and support the national agenda of having a 35% skilled workforce, said HRDF chief executive officer Datuk C.M. Vignaesvaran (pic).

“HRDF is like a private company. We do not receive government funding for our operations.

“We take the levy received, put it in fixed deposits and the interest is used to fund our operations,” said Vignaesvaran in an interview with The Star yesterday.

The law requires employers to submit 1% of their workforce payroll to HRDF to carry out training and upskilling programmes.

“None of the operating costs or allowances comes from the levy. Levy is only used for training and training-related expenses, as stipulated in our Act,” said Vignaesvaran.

Recently, an English daily raised questions over the monetary package received by HRDF’s board of directors.

It also questioned other perks, including travel, hotel accommodation and subsistence allowance when meetings are held out of Kuala Lumpur.

Vignaesvaran said HRDF reviewed the remuneration of its board members by carrying out a study in line with its Human Capital Transformation initiative.

In 2014, he said, a government circular on the remuneration also indicated that HRDF was underpaying its board members.

“One of the conclusive findings was that the board members’ remunerations were not competitive, not only in comparison with listed entities but also with government institutions,” he said.

The industry’s annual average for board of directors’ remuneration in 2013 ranged from RM65,000 to RM122,000 per person per annum.

In government agencies or institutions, it ranges from RM35,000 to RM150,000 per person per annum.

Vignaesvaran said that in keeping with industry standards, HRDF revised the remuneration for its board of directors to RM48,000 per person per annum.

“This is still way below 2013 industry trends and well within the standard set by the Government,” he said, adding that the revision was approved in November 2014 and became effective the following month.

“Prior to the revision, a director received RM12,000 per person per annum,” he said.

Vignaesvaran also believed that the allowances would further encourage the board members to diligently carry out their responsibilities.

Source