M’sian-born CEO paid more than tech titans

Leading the pack: Tan beats Cook, Musk and Zuckerberg in the analysis by the WSJ. — Photo from Broadcom Inc

Tan tops list of highest paid executives in the US last year 

PETALING JAYA: The highest-paid chief executive officer in the United States is neither Apple’s Tim Cook nor Tesla’s Elon Musk, but Malaysian-born businessman Tan Hock Eng.

Tan, 71, also surpassed Meta Platforms’ Mark Zuckerberg by earning US$162mil (about RM760mil) in compensation last year, according to South China Morning Post, which quoted an analysis by the Wall Street Journal (WSJ) this week.

“Tan, who is a US citizen, is the CEO of semiconductor company Broadcom Inc and has been topping the pay charts since 2006, receiving US$103mil in 2017,” said WSJ.

However, the pay package comes with several conditions, including the company’s stock hitting a certain level by next year. Tan must also remain as CEO for an additional five years, and he will not receive any more equity or cash bonuses during that period.

The semiconductor company’s shares rose 106% over the past 12 months, bringing its total market capitalisation to US$655bil (RM3 trillion).

Tan is also a board member of Meta Platforms, the US-based company that owns Facebook, Instagram and WhatsApp among others.

Tan, who hails from Penang, completed his undergraduate studies in mechanical engineering at the Massachusetts Institute of Technology.

He also has a bachelor’s degree in electrical engineering from the National University of Singapore. He then earned a Master of Business Administration from Harvard University. After returning to Malaysia, he was involved with Hume Industries between 1983 and 1988.

He then moved to Singapore as managing director of venture capital firm Pacven Investment.

He reportedly relocated back to the United States in 1992 and assumed the role of vice-president of finance for PC maker Commodore International.

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Loans, not grants to strengthen bumiputra economy

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‘Tougher’ approach: Rafizi said the pivot to providing credit instead would ensure applications from those who are serious about building a business. — Bernama

CYBERJAYA: In a break from past practices, the unity government is moving away from giving grants to bumiputra entrepreneurs. Instead, it will assist them with loans as part of its agenda to strengthen the community’s economy.

By getting entrepreneurs to pay back what they borrow, the government hopes to create a steady supply of funds that could benefit more such businessmen, said Rafizi Ramli.

Under the initiative, the government also hopes to build a sustainable business ecosystem producing the right kind of professionals and businesses that will see micro and small enterprises scaled up to create value, the Economy Minister told reporters after an event here yesterday featuring three of the ministry’s agencies tasked with bumiputra empowerment.

The agencies – Teraju, Ekuiti Nasional Berhad (Ekuinas) and Yayasan Peneraju (Peneraju) – have been realigned to focus their resources and energies on creating the bumiputra business ecosystem envisioned by the ministry.Rafizi emphasised that the “tougher” approach of building an ecosystem and assisting businesses with credit instead of grants, would be more effective at creating successful bumiputra firms.

“One of the differences (from the past) is focus. For instance, in the past, Teraju gave out grants to everyone, large or small. They did not focus on building an ecosystem,” Rafizi said.

“Peneraju also gave scholarships to every bumiputra who wanted to be professional, but it was up to them to decide what kind of professional they wanted to be.”

This approach, he said, “did not connect the dots” between the professional talent being nurtured and the grants being given out to entrepreneurs.

As part of its own realignment, Peneraju, which was previously tasked with creating bumiputra professionals such as chartered accountants and chartered financial analysts, will now focus on nurturing business leaders.

Peneraju chief executive officer Ibrahim Sani said that instead of just creating more professionals to join the workforce, the foundation’s new accelerator programme will train talent to start venture capital funds.

“This will hopefully create a cycle, and bumiputra entrepreneurs need people to invest in their companies,” he said during the event.

Similarly, Ekuinas, which previously concentrated on assisting large bumiputra companies to become listed on the stock market, will now offer loans and credit to mid-size businesses to enable them to scale up.

Ekuinas chief executive officer Datuk Syed Yasir Arafat Abd Kadir said this was because medium and small firms often had trouble getting loans from banks, which then hobbled their ability to expand.

On the strategy of providing credit instead of grants, Rafizi said this would ensure that only those who are serious about building a business would apply for the funds.

“If you give out a grant of RM500,000 to someone and, at the end of two years, he says the business flopped, that money would be wasted. It could’ve gone to so many other people.

“We want people who want to really do business because they have to repay what they borrowed. They will only take money if they are confident they can pay it back.

“We don’t want our funds to just go to 500 people; we want them to go to thousands, but in order to do that, we have to roll the money.”

Rafizi stated that this strategy would generate additional funds and opportunities for bumiputra firms to expand, enabling them to list on the stock market and achieve sustainability.

“We must work on the assets and the funds. It is controversial, but my hope is that people will know that a tougher approach is what is needed for bumiputra entrepreneurs to accelerate their competitiveness.”

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No grants 'not the right way'

https://www.thestar.com.my/news/nation/2024/05/22/no-grants-not-the-right-way

PETALING JAYA: Many bumiputra entrepreneurs have no problems accepting the government’s new approach of giving them loans instead of grants to grow their businesses.

However, the “harder approach” of doing away with grants under the bumiputra development agenda could result in a backlash from the community, they say.

“I think that this is not quite the right way of doing it,” said Malay Economic Action Council (MTEM) senior fellow Ahmad Yazid Othman.

“It must be understood that grants are given to those who may not be able to support themselves. I don’t think it would be welcomed by the community and may not have the right impact,” he said.

However, he said the council supported the announcements by Economy Minister Rafizi Ramli on the new approach.

Although the new approach could prevent abuses, Ahmad said the situation for bumiputra enterprises may not improve if the policy is ill-implemented.

On Monday, Rafizi announced that the unity government was moving away from giving grants to bumiputra entrepreneurs but would instead assist them with loans as part of its agenda to strengthen the community’s economy.

The minister said that by getting entrepreneurs to pay back what they borrow, the government hopes to create a steady supply of funds that could benefit more such businessmen.

Three agencies – Teraju, Ekuiti Nasional Berhad (Ekuinas) and Yayasan Peneraju (Peneraju) – will realign to focus their resources and energies on creating the bumiputra business ecosystem envisioned by the ministry.

Ahmad, who is also Malay Chamber of Commerce Malaysia secretary-general, lauded the move by Teraju to widen the scope of those in the eco-system that contribute towards the success of the new approach.

He also said the relevant ministries must not work in silos but should collaborate to ensure the success of programmes.

Malay Businessmen and Industrialists Association of Malaysia (Perdasama) president Mohd Azamanizam Baharon also said the grant scheme should be maintained but given out to bumiputra companies based on merit and high level of competency.

Grants via Teraju should still be made available, he said, particularly for bumiputra companies involved in the renewable energy sector. However, he too added that Perdasama agreed that bumiputra businesses should not rely solely on government grants or aid.

Planned e-invoicing will be troublesome

KUALA LUMPUR: The planned introduction of e-invoicing will be both redundant and cause more trouble than it is worth, says Datuk Seri Dr Wee Ka Siong.

The MCA president said the government’s push to prevent tax evasion could be easily solved by the reintroduction of the Goods and Services Tax (GST) rather than e-invoicing.

“If we look at GST previously, we didn’t need to mandate this (invoicing) as it was already an automatic mandatory component of GST for those that wanted to get their tax refunds.

“This made it a two-in-one solution as the government didn’t need to make any sort of invoicing compulsory as businesses were forced to produce clear records to claim tax refunds,” he said in a video on his Facebook page yesterday. 

Dr Wee, who is the Ayer Hitam MP, also noted how the frequently changing guidelines – currently at version 2.1 – by the Inland Revenue Board were causing unnecessary confusion.

“This is already the sixth version and every few days it changes.

“How is anyone expected to keep up with this constant development, especially as it’s a complete system transition

“I understand there is also no significant allocation for any workshops or campaigns to educate businesses on how to transition.

“This is a serious issue, as they need to know the transition process in order to be able to comply with it,” he said, adding that the new system could disproportionately impact small businesses negatively.

“This is because compliant businesses will need to digitalise all their business transactions through e-invoices that smaller businesses don’t need to provide.“As such, larger businesses may be discouraged or even indirectly banned from engaging with smaller businesses due to the need for e-invoices that smaller businesses cannot provide.

“This effectively forces smaller businesses to have to implement e-invoicing if they want to engage with bigger businesses,” he said.

Dr Wee noted that the requirement for businesses to fill out 55 data fields for e-invoicing, which carries a penalty of up to RM20,000 for each error, worsens the situation. This exposes businesses to additional financial strains, such as paying fines or hiring administrative or accounting professionals to complete the data.

“How many people understand what a credit note and a debit note are? The big businesses may be fine, but the small ones will have to pay experts to help them solve this,” he said, adding that security and tax data privacy concerns must also be addressed ahead of the new digital system’s implementation.

“Having all 55 data fields from various big businesses collected and stored in a central database makes it a prime target for hackers.

“We still don’t know what cybersecurity measures they may have to defend the system,” he said.

The e-invoicing system will be rolled out gradually starting on Aug 1, and eventually be extended to all taxpayers by July 1, 2025.

Prime Minister Datuk Seri Anwar Ibrahim has said the e-invoicing system will be applied first to taxpayers who earn an annual income exceeding RM100mil.

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e invoicing Malaysia solution - Malaysia IRBM e-invoicing

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Microenterprises unprepared for e-invoicing, says Wee

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Mandatory e-invoice countdown clock starts next week

Give us time to adjust, urge small businesses

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