A Kenya Airways shareholders reads through the annual report during the airline’s AGM in Nairobi in 2013. PHOTO | FILE
By VICTOR JUMA, vjuma@ke.nationmedia.com
In Summary
- Kenya Airways rewards two top earners with monthly pay of Sh8.5 million up from last year’s Sh6.4 million.
- Outgoing CEO Titus Naikuni’s and finance director Alex Mbugua’s pay jumped 33.7 per cent to Sh103 million last year even as the airline stayed deep in the red with a Sh3.3 billion net loss.
- Mr Naikuni and Mr Mbugua are listed as the only executive directors who sit on the Kenya Airways board.
Top Kenya Airways
executives’ pay rose by one third in the past financial year, defying
the multi-billion-shilling loss that the airline reported in the same
period, the just released annual report show.
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Outgoing chief executive officer Titus Naikuni’s and finance
director Alex Mbugua’s pay jumped 33.7 per cent to Sh103 million last
year even as the airline stayed deep in the red with a Sh3.3 billion net
loss.
A total annual take-home of Sh103 million means the
duo’s monthly pay package rose to Sh8.5 million, up from the previous
year’s Sh6.4 million.
It is not possible to determine how the money is
shared between the two executives although Mr Naikuni is expected to
take a larger portion.
Kenya Airways made a net loss of Sh7.8 billion in
2012, making last year’s Sh3.3 billion loss a 57 per cent improvement.
Mr Naikuni and Mr Mbugua are listed as the only executive directors who
sit on the Kenya Airways board.
The financial results for the year ended March 2014
show that KQ, as the airline is popularly known, rewarded its top
executives more robustly than the rest of its employees whose average
monthly wages rose 18.2 per cent to Sh328,812 from Sh269,845 the
previous year.
The airline’s 3,889 employees (representing a
slight drop in the staff count from the previous year’s 4,006) earned a
total of Sh15.3 billion in the 12 months ended in March.
The total pay for KQ’s employees stood at Sh12.9 billion in the year ended March 2013.
Mr Naikuni and Mr Mbugua’s pay increment stands out
because 2013 was the second consecutive year that KQ shareholders
missed dividend payouts as the airline sought to weather turbulence in
its operations and stayed in the loss-making territory.
KQ has in recent months been pursuing an ambitious
expansion plan that has seen it chalk up multi-billion-shilling debt
that is expected to further weigh down its earnings in the current
financial year.
KQ last declared a dividend of Sh0.25 per share for
the year ended March 2012, when it made a Sh1.6 billion net profit. The
airline’s stock has gained nine per cent in the past 12 months and
closed yesterday’s trading at Sh9.80.
Executive pay is a hot subject globally over which shareholders and management have fought epic battles in recent times.
Corporate governance experts say remuneration of
executives should be an important yardstick against which shareholders,
especially in public listed companies, can assess the performance of
senior management.
Most corporations use salaries, stock options, and
allowances as incentives for retaining top talent and driving management
performance.
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