Pnb Case Study

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Before disposing of the shares, PNB was the second largest shareholders and its shareholders have a significant influence in Asia File Corporation Bhd. At the Annual General Meeting for financial year ended March 2011, PNB voted aginst the reappointment of three independent directors and refused to approve the directors’ fee of RM242,000. However, PNB did not have enough votes to outnumber the majority; therefore the objection was not successful.
In this same case, we can identity another dispute too which is the dispute on remuneration of board members. The typical examples include: disputes between shareholders and the remuneration committee or the board over remuneration of board members.
According to the article, PNB’s decision to pull
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The typical examples include disputes between shareholders or boards and works’ councils on the interpretation and applicability of works’ council legal corporate governance related rights. A work council is a representative body of employees selected to provide direct input into the company’s operational activities.
During October last year in Sydney, there was an employee strike on Qantas Airway during the AGM. Qantas is an airline that provides budget flights mostly for Australia domestic flights. The campaign was to object the increase of Qantas executive pay, Mr Alan Joyce’s remuneration. His remuneration increased by 71 percent which is from $2.92 million to $5.01 million. Other than that, he was given a 1.7 million Qantas shares under a long-term incentive plan. The total value of remuneration for the Qantas executives in 2010-11 was $14.44 million, up from $8.91 million in the year before.
The represented unions that made the opposition were the long-haul pilots, aircraft engineers and ground crew. The workers all across Australia stopped work for an hour at airports and thousands of baggage handlers and other ground crew have resolved to intensify their industrial action. However, 96 percent of shareholders voted in favour with the remuneration resolution. Qantas employees demanded a higher pay and better benefits. In actual fact, Qantas employees are paid 12 percent higher than Virgin Blue Airline employees.
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Agency theory suggests that it is important to allocate risks and responsibilities for decision control to parties who are best able to perform them. As a CEO, it is Alan’s responsibility to monitor the firm. As the investors increase their investment in Qantas, the risk and pressure in performance increase. Therefore, increased monitoring intensity shifts risks to managers, who require higher pay to compensate them for the increasingly intense employment risk they must undertake as key executives. Qantas employees should understand that as monitoring intensity increases, managers’ job security is less certain, and they may view it as having to take on extra risk. Because of this extra risk, over time they demand and are able to receive more
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