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Management remuneration from Subsidiaries

Questions › Category: Management Quadrant › Management remuneration from Subsidiaries
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Clement Ong asked 6 years ago

Hi Fifth Person,
I’m assessing a company called New Toyo International which is in the business of the sale and printing of packaging materials. 
When assessing the Management renumeration, I noticed that some of their Board members are also on the Board of a subsidiary, Tien Wah Press Holdings Berhad which is 54% owned by New Toyo. 
I have 2 questions:

  1. Do we take into account the director’s fee from the subsidiary when assessing the management renumeration for the New Toyo Management?
  2. Is this a red flag if the director’s are also receiving income from a subsidiary (which is listed on the Bursa Malaysia)?

Thank you.

1 Answers
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Best Answer
Victor Chng answered 6 years ago

Hi Clement,

  1. Yes you can take into account the fee when accessing management.
  2. It is not a red flag just that you have to take note if the management take too excessive remuneration while the business is going down.