Mealmix Berhad (Mealmix) is a FTSE Top 100 Index company in the food delivery business with...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mealmix Berhad (Mealmix) is a FTSE Top 100 Index company in the food delivery business with its shares listed on the Main Market of the Bursa Malaysia. The Board of Mealmix consists of a non-executive Chair, three independent non- executive directors, the Chief Executive Officer and the Chief Financial Officer. The remuneration committee of Mealmix is currently reviewing the remuneration policy which is required to be proposed at the next Annual General Meeting. At the Annual General Meeting last year, 25% of shareholders voted against the remuneration report. The shareholder discontent was focused on three aspects of the performance targets in the current long-term incentive plan. Firstly, the targets have been linked to the share price, which has increased significantly over the last few years but well behind the rest of the food industry. Secondly, some of the performance targets were met as a result of an increase in the size of the business following the acquisition of another food delivery business in which the remuneration committee was not involved. Thirdly, the targets have been focused on financial performance and not on non-financial factors such as employee retention and customer satisfaction. The Chair of Mealmix, Borhan Nordin, has told the Company Secretary, Helen Tang, that he wants to have a renewed focus on the content of the company's Corporate Governance Report in the company's next Annual Report. Mealmix has not been compliant with two of the Malaysian Code on Corporate Governance (MCCG 2017) during the current financial year: There was no detail disclosure on bonus and benefits in-kind on named basis for the remuneration of individual directors. The company only had two (rather than three) members of its remuneration and audit committees for a three-month period during the year because one of its independent non-executive directors unexpectedly resigned with immediate effect. It took three months to appoint a replacement independent non-executive director who could then join those committees, and that appointment was made before the year-end. REQUIRED: (a)Discuss how a long-term incentive plan can link executive director pay to long-term performance and the ways in which the remuneration committee could revise the Mealmix long-term incentive plan to better link the executive directors' pay to their performance and to prevent "rewards for failure" (including clawback provisions or downward revaluation of remuneration awards). (17 marks) b)Prepare a note from Helen, the Company Secretary to, Borhan, the Chair of Mealmix explaining the requirements in the Listing Rules and the MCCG 2021 Code about reporting on compliance with the principles and practices in the MCCG 2021, including the impact of Mealmix's non-compliance with a number of the practices in the MCCG 2021. (8 marks) Mealmix Berhad (Mealmix) is a FTSE Top 100 Index company in the food delivery business with its shares listed on the Main Market of the Bursa Malaysia. The Board of Mealmix consists of a non-executive Chair, three independent non- executive directors, the Chief Executive Officer and the Chief Financial Officer. The remuneration committee of Mealmix is currently reviewing the remuneration policy which is required to be proposed at the next Annual General Meeting. At the Annual General Meeting last year, 25% of shareholders voted against the remuneration report. The shareholder discontent was focused on three aspects of the performance targets in the current long-term incentive plan. Firstly, the targets have been linked to the share price, which has increased significantly over the last few years but well behind the rest of the food industry. Secondly, some of the performance targets were met as a result of an increase in the size of the business following the acquisition of another food delivery business in which the remuneration committee was not involved. Thirdly, the targets have been focused on financial performance and not on non-financial factors such as employee retention and customer satisfaction. The Chair of Mealmix, Borhan Nordin, has told the Company Secretary, Helen Tang, that he wants to have a renewed focus on the content of the company's Corporate Governance Report in the company's next Annual Report. Mealmix has not been compliant with two of the Malaysian Code on Corporate Governance (MCCG 2017) during the current financial year: There was no detail disclosure on bonus and benefits in-kind on named basis for the remuneration of individual directors. The company only had two (rather than three) members of its remuneration and audit committees for a three-month period during the year because one of its independent non-executive directors unexpectedly resigned with immediate effect. It took three months to appoint a replacement independent non-executive director who could then join those committees, and that appointment was made before the year-end. REQUIRED: (a)Discuss how a long-term incentive plan can link executive director pay to long-term performance and the ways in which the remuneration committee could revise the Mealmix long-term incentive plan to better link the executive directors' pay to their performance and to prevent "rewards for failure" (including clawback provisions or downward revaluation of remuneration awards). (17 marks) b)Prepare a note from Helen, the Company Secretary to, Borhan, the Chair of Mealmix explaining the requirements in the Listing Rules and the MCCG 2021 Code about reporting on compliance with the principles and practices in the MCCG 2021, including the impact of Mealmix's non-compliance with a number of the practices in the MCCG 2021. (8 marks)
Expert Answer:
Answer rating: 100% (QA)
a Linking Executive Director Pay to LongTerm Performance and Revising Mealmixs Plan LongTerm Incentive Plans and Performance A welldesigned longterm incentive plan can motivate executive directors to ... View the full answer
Related Book For
Foundations Of Business
ISBN: 9780357717943
7th Edition
Authors: William M. Pride, Robert J. Hughes, Jack R. Kapoor
Posted Date:
Students also viewed these finance questions
-
According to Sen. Carl Levin, what is the harm of tax avoidance strategies? a. The lost tax revenue from tax avoidance strategies feeds a budget deficit. b. Companies that use tax avoidance...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
For its No Interest for One Year Sale, Flemmings Furniture advertises that customers pay only a 10% down payment. The balance may be paid by 12 equal monthly payments with no interest charges....
-
Find the mass (in kg) of 1.00 m3 of (a) Water, (b) Gasoline, (c) Copper, (d) Mercury and, (e) Air at 0C and 1 atm pressure.
-
Which one of the following statements is true? a. Sound internal control practice dictates that cash disbursements be made by cheque, unless the disbursement is very small b. The person handling the...
-
Companies U and L are identical in every respect except that U is unlevered while L has $10 million of 5% bonds outstanding. Assume that (1) all of the MM assumptions are met, (2) both firms are...
-
It costs Cullumber Company $ 7 of variable costs and $ 3 of fixed costs to produce its product at full capacity. However, the company currently has unused capacity. The product sells for $ 1 5 ....
-
Information on Kwon Manufacturing??s activities for its firstmonth of operations follows: Purchased $100,300 of raw materials oncredit. Materials requisitions show the following materials usedfor 2...
-
Medical schools announce that residents in plastic surgery can be licensed after only five years instead of the current seven years. It seems that medical schools have announced a change in licensing...
-
Describe how you might select a nursing theory. What factors would you consider in determining the feasibility of the theory for your setting? Analyze how the history of Christianity has framed the...
-
According to the idea of the "invisible hand" in Adam Smith's theory of political economy, intentional pursuit by the individual of one's own self interest leads to unintentional benefits for the...
-
Holding all else constant (including firm value and the face value of debt), does a higher asset volatility increase or decrease equity value? What about the likelihood of default? Explain how these...
-
A value of your investment portfolio increased by 7.4%, while the general price level increased by 1%. What was the approximate real return on your portfolio?
-
Thanks!. Consolidation worksheet for gain on constructive retirement of subsidiary's debt with no AAP-Cost method Assume that a Parent company acquires a 75 percent interest in its Subsidiary on...
-
Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of...
-
What natural instincts cause some managers to resist detailed comparisons with competitors?
-
How do growth economies differ from scale economies or learning curve effects?
-
What is the significance of strong growth economies among the Fortune 500?
Study smarter with the SolutionInn App