ST: F&N chairman's retirement payout was $4m instead of $3m

State-linked Singapore investment company Temasek Holdings has acquired a 14.9 percent stake in Fraser and Neave (F&N) for 900 million Singapore dollars (588 million US), the food and beverage maker has said. Friday December 8

Jan 6, 2007
F&N chairman's retirement payout was $4m instead of $3m
Wrong figure had been disclosed in last year's annual report
By Lee Su Shyan, Companies Correspondent

IT TURNS out that the bumper retirement gratuity paid to Fraser & Neave (F&N) non-executive chairman Michael Fam was actually $4 million, not $3 million as disclosed by the firm last year.

F&N said the wrong figure was inadvertently published in last year's annual report.

It also emerged that Mr Fam earned more in the year to Sept 30 than in the previous year - even though he retired from the top job a third of the way into the year.

Mr Fam, 79, stepped down as executive chairman in January last year but stayed on as non-executive chairman and as a consultant to the company.

The retirement payout, which was part of his contract, was for 23 years of service to the beverage, property and publishing group.

It was paid in January last year, but last year's annual report contained only the $3 million figure, while the extra $1 million appeared in the company's just-released annual report.

The latest annual report said Mr Fam received between $2.75 million and $3 million in total pay.

This comprised salary, which covered part of the year when he was still executive chairman, director's fees and fees for being a consultant to F&N. This is in addition to his retirement gratuity.

The previous year, he received between $2.25 million and $2.5 million in salary, bonus and fees.

Despite having retired from his duties as an executive chairman, he still remains the most well-paid director on the board.

Dr Han Cheng Fong, the former managing director who took on the post of group chief executive in February last year, was paid between $2 million and $2.25 million for the year ended Sept 30.

At last year's annual general meeting (AGM) in January, Mr Fam told shareholders that he was remaining as chairman and consultant to ensure a smooth transition. A search was launched for his successor.

But he will remain as non-executive chairman for the time being, at the request of the board, to oversee the entry of Temasek Holdings as F&N's second-largest shareholder. The search for a successor is still ongoing, according to F&N.

As a result of the Temasek deal to take up a 14.9 per cent interest in F&N, announced last month, the F&N board will swell to 11 or possibly 12 members.

Temasek is to get two board seats. One will go to Temasek's executive director, Mr Simon Israel. It is not known if Temasek will nominate another director for its second board seat.

Temasek's entry to the business will help spur the growth of the food and beverage businesses, for products such as the famed Tiger Beer, soft drinks and other beverages such as milk.

Already, F&N's unit Asia Pacific Breweries has increased the number of breweries from 24 last year to 29.

For the last financial year, food and beverage's revenue increased 3.5 per cent to $1.9 billion. The division's profits rose 10 per cent to $85.6 million, representing 29 per cent of F&N's total profits before exceptionals of $295 million.

F&N's share price rose 20 per cent over the financial year, exceeding The Straits Times Index's rise of 11 per cent over the same period.

F&N's AGM will be held on Jan 25.

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Mr Michael Fam's total remuneration for the year ended Sept 30 was between $2.75 million and $3 million. This amount is in addition to his retirement gratuity.