Centum cuts staff bonus pay by 7.9 pc

Corporate News

Centum CEO James Mworia explains the Two Rivers housing project at the company’s investor briefing on June 10, 2014. Photo/FILE 

By VICTOR JUMA

In Summary

• The investment firm says it pays bonuses if shareholder funds or the net asset value rises by more than 15 per cent in a financial year.
• Centum’s seven executives earned a bonus of Sh96.9 million last year, down eight per cent from Sh105.3 million in 2012.

Centum Investment cut staff bonuses by nearly eight per cent last year but the payout still exceeded the overall employee salaries for the year, the company’s annual report has showed.

 

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Centum’s seven executives earned a bonus of Sh96.9 million last year, down eight per cent from Sh105.3 million in 2012.

The executives’ combined salaries rose 45.5 per cent to Sh86.7 million in the year, but the amount still trailed the bonus by 12 percentage points.

“The group’s performance bonus scheme is designed to enable achievement of consistent business growth that is tied to the increase in shareholder wealth, which is a primary business objective,” said Centum in a statement.

The Nairobi Securities Exchange-listed firm lists its seven directors and senior managers as CEO James Mworia, Risper Mukoto (finance director), James Kaguchia (acting private equity director), Fredrick Murimi (corporate affairs director), Pius Muchiri, (MD Centum Asset Managers), Graeme Reid (MD of Athena Properties) and his deputy Chris Ochieng.

Centum Asset Managers and Athena Properties are subsidiaries of the company.

The investment firm says it pays bonuses if shareholder funds or the net asset value rises by more than 15 per cent in a financial year.

Once the target is met, the executive team is then entitled to take up to a fifth of the excess value created.

In the year ended March, Centum’s net asset value jumped 42.1 per cent to Sh22.9 billion, beating the target by 27.1 percentage points.

Centum’s net profit in the review period rose 21.7 per cent to Sh3 billion compared to Sh2.5 billion a year earlier, helped by unrealised gains in its real estate ventures.

The company says its paper gain on the property projects such as Two Rivers rose 90 per cent to Sh3 billion from Sh1.6 billion.

Its share price has nearly doubled over the past one year to Sh44. The capital gains have been critical for Centum’s shareholders who have had to forego dividends in line with the company’s policy of re-investing its entire earnings.

vjuma@ke.nationmedia.com