Due to no dividend payments, a number of shareholders have compared with the remuneration of bank leaders. However, bank leaders said that such remuneration was not commensurate with the effort spent.
At the Annual general Meeting of Shareholders (AGM) of Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) on June 5, many shareholders were upset because they had not received any dividends in the past years, while the members of the Board of directors (BOD) and The Supervisory Board (SB) still receives remuneration of over ten billion dong.
Specifically, the remuneration of the Board of directors and the Supervisory Board of Sacombank in 2019 was approved by the AGM at two percent of profit before tax. In 2019, Sacombank reached 3.217 trillion dong of consolidated profit before tax.
But according to Sacombank’s Board of directors in the past year, the remuneration paid to BOD members and the Supervisory Board only used about 1.4 percent of the consolidated pre-tax profit of 2019.
In 2020, Sacombank’s BOD will continue to submit to the AGM for approval that the remuneration of BOD and the Supervisory Board is equal to 2019 at two percent of the total consolidated profit before tax.
Moreover, Sacombank expects consolidate pre-tax profit of 2.573 trillion dong, down 20 percent compared to the result of 2019. However, the Board of directors and the Supervisory Board said that they would try to achieve an equal profit before tax with 2019.
The leaders of the bank said that, in order to manage the bank’s activities, the BOD members and the Supervisory Board made a lot of effort, so the remuneration for the BOD members and the Supervisory Board were appropriate.
Notably in the current period, when Sacombank is going through the restructuring process and has to concentrate all resources, it has not been able to pay dividends to shareholders in order to comply with the SBV regulations, despite the bank’s profits of 4.5 trillion dong.
Similarly, Saigon Commercial Joint Stock Bank (SCB) cannot distribute dividends to shareholders, while the retained earnings up to now are 1.234 trillion dong. According to SBV regulations, the bank is undergoing restructuring process so dividend payment is not allowed. Therefore, a number of shareholders compare with the remuneration of the BOD and the Supervisory Board. The remuneration for them in 2019 was 13 billion dong and most of this budget was used.
However, by 2020, Vietnam’s economy in general and SCB’s operations in particular will be affected by the Covid-19 pandemic, affecting business results. Therefore, SCB’s BOD submits to the AGM for approving the lower remuneration of the BOD and the Supervisory Board at 11 billion dong, down 15 percent from the previous year.
Based on the total remuneration approved by the AGM, SCB’s AGM authorises the BOD to decide and adjust the remuneration and other benefits for members of the BOD and the Supervisory Board to ensure the governance and the management achieve the highest efficiency and report at the AGM in 2021.
However, according to Vo Tan Hoang Van, general director of SCB, the remuneration paid to members of the Board of directors and the Supervisory Board is not high and has not yet made up for their efforts in the bank’s restructuring. SCB’s Board of directors is also concerned with the dividend distribution to shareholders, which must wait until the end of the restructuring process.
The AGM of Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) at the end of May 2020 also approved the remuneration of the BOD and the Supervisory Board in 2020 equivalent to 0.5 percent of the consolidated profit before tax achieved this year. This remuneration level is unchanged from the previous year. VPBank aims to achieve a pre-tax profit of 10.214 trillion dong by 2020, down one percent compared to 2019.
The total remuneration, part-time remuneration paid to the BOD and the Supervisory Board in 2019 of An Binh Commercial Joint Stock Bank (ABBank) amounted to nearly 22 billion dong, implemented in the remuneration plan for the BOD and the Supervisory Board approved at the annual meeting on April 25, 2019.
Apart from the above remuneration and expenses, because in 2019, ABBank exceeded the profit plan of 1.2 trillion dong, the BOD and the Supervisory Board were awarded one percent of the planned profit and five percent of the profit exceeding the plan based on the Resolution passed at the annual meeting on April 25, 2019.
On June 12, ABBank will hold the 2020 annual shareholder meeting in Hanoi to submit to shareholders for approval of the remuneration of the BOD and the Supervisory Board in 2020 of 24.2 billion dong (up 10 percent compared to 2019).
In case ABBank’s profit before tax in 2020 achieves or reaches the profit target set by the AGM, the bonus fund for BOD members and Board of Supervisors is one percent of the planned profit and five percent of the exceeding profits.
According to the 2020 plan, ABBank targets 1.358 trillion dong profit, 10 percent higher than the previous year.
