Corporate News
It is a nerve-racking race as some corporations increase executive pay by up to 83pc a year. PHOTOS | FILE
By Victor Juma, vjuma@ke.nationmedia.com
In Summary
- The Business Daily’s analysis of executive compensation in the past financial year found that the financial services and telecommunication sectors remain Kenya’s most lucrative in terms of executive compensation.
- The list of top earning executives includes Housing Finance (HF) managing director Frank Ireri, Pan Africa Holdings’s Tom Gitogo and retail chain Uchumi’s Jonathan Ciano.
- The steep rise in executive compensation in Kenya is seen as partly driven by the scramble for scarce corporate leadership talent in a market where employers continue to decry a dire shortage of skilled staff needed to craft and execute growth strategies.
Kenya’s corporate executives used relative stability
of their companies’ performance to significantly grow their pay in the
past financial year, the latest round of reporting by public-listed
firms show.
Executive compensation rose by margins of up to 38 per cent
in a single year, mostly reflecting growth in profitability - save for a
few cases where the company bosses went against the grain, adding
millions to their compensation even as the businesses they lead became
less profitable or sank into loss-making altogether.
The Business Daily’s analysis of executive
compensation in the past financial year found that the financial
services and telecommunication sectors remain Kenya’s most lucrative.
The list of top earning executives whose pay the Business Daily was able to compute from the annual reports includes Housing Finance (HF) managing director Frank Ireri, Pan Africa Holdings’s Tom Gitogo and retail chain Uchumi’s Jonathan Ciano.
The trio has now joined the league of big earners who are running blue chip companies such as Safaricom, KCB, East African Breweries (EABL), Co-operative Bank, Kenya Airways and Britam
where total executive pay rose by up to 83 per cent, lifting by large
margins the pay of CEOs that are lumped with those of senior managers.
The steep rise in executive compensation in Kenya
is seen as partly driven by the scramble for scarce corporate leadership
talent in a market where employers continue to decry a dire shortage of
skills needed to craft and execute growth strategies.
Companies are also rewarding top executives for
profitability growth that benefits shareholders in terms of dividend
earnings and capital gains for stocks traded on the Nairobi Securities
Exchange (NSE).
Financial reports show that Mr Gitogo’s monthly pay
rose nine per cent to Sh2.5 million in the year ended December 2013
from the Sh2.3 million he earned the year before.
The pay review came as the financial services firm more than doubled its net earnings to Sh1.2 billion, helped by higher investment income and appreciation of its equity portfolio.
Pan Africa’s share price has more than doubled in the past 12 months to trade at Sh120.
At Housing Finance, the monthly remuneration of Mr
Ireri leaped 14.5 per cent to Sh4.9 million in the year ended December,
up from Sh4.2 million a year earlier.
The mortgage financier reported a 34 per cent
increase in net earnings to Sh995.1 million in the same period, driven
by higher interest income and sale of properties.
HF’s share price has appreciated 76 per cent in the past year to trade at Sh44.5.
Mr Ireri has recently joined the club of CEOs with
substantial ownership in the firms they lead after he bought 225,000
shares in HF currently worth Sh10 million.
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