Co-op Bank chief executive’s annual pay hits Sh376 million

Cooperative Bank CEO Gideon Muriuki. FILE PHOTO | NMG 

By VICTOR JUMA
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Summary

• Mr Muriuki’s salary and bonus pay in 2018 marked a slight increase from the 2017 take-home of Sh370 million.
• Mr Muriuki’s compensation stayed ahead of KCB Group’s
• Joshua Oigara who also got a 6.6 percent pay rise last year to Sh273 million, up from Sh256 million in 2017.
• Equity Group left the pay of chief executive James Mwangi unchanged at Sh60.4 million in the review period.
• Co-op Bank reported an 11.6 percent rise in net profit to Sh12.7 billion in the year ended December compared to Sh11.4 billion the year before, helped by lower costs and increased investment in government debt.

Co-operative Bank boss Gideon Muriuki’s annual pay increased to Sh376.4 million last year, securing his position as the highest-paid CEO of all the Nairobi Securities Exchange (NSE)

listed companies.

Mr Muriuki’s salary and bonus pay in 2018 marked a slight increase from the 2017 take-home of Sh370 million.

His bonus was largely unchanged at Sh271 million in the year ended December 2018, but his salary rose by Sh5.6 million or 5.6 percent to Sh105.4 million, accounting for the total pay rise.

In a statement, Co-op Bank said the remuneration is a reward to Mr Muriuki who is credited with turning around the bank and growing it to Kenya’s third-biggest lender by earnings and assets size.

“The group has invested in a performance-driven reward structure, and the board has rewarded tremendous growth and transformation of the bank from a huge loss position of Sh2.3 billion in year 2001 and an asset base of only Sh25 billion to now one of the largest banks in the region with an asset base of over Sh425 billion,” Co-op Bank said in a response to queries from the Business Daily.

“It is a celebrated transformation journey now with the bank for over 18 years as the chief executive officer.”

The lender added that Mr Muriuki has made Co-op a universal bank that holds a 26.5 percent stake in CIC Insurance Group and is a joint venture partner in leasing business with Super Group.

Mr Muriuki’s compensation stayed ahead of KCB Group’s Joshua Oigara who also got a 6.6 percent pay rise last year to Sh273 million, up from Sh256 million in 2017.

Equity Group left the pay of chief executive James Mwangi unchanged at Sh60.4 million in the review period.

Co-op Bank reported an 11.6 percent rise in net profit to Sh12.7 billion in the year ended December compared to Sh11.4 billion the year before, helped by lower costs and increased investment in government debt.

The lender’s loan loss provisions declined 48.8 percent to Sh1.8 billion despite a 56.7 percent rise in gross non-performing loans to Sh29.4 billion.

Operating expenses and interest paid on customer deposits were also held steady at Sh25.6 billion and Sh12.2 billion respectively.

The lower interest expense was achieved despite customer deposits increasing 6.5 percent to Sh306.1 billion, indicating a significant inflow into non-interest-bearing accounts.

Co-op Bank invested an additional Sh11 billion in government bonds and T-bills in the year, raising its stock of the securities to Sh80.2 billion in what helped raise total interest income 6.5 percent to Sh43 billion.

The lender raised its dividend to Sh5.8 billion from the previous year’s Sh4.6 billion, equivalent to a payout per share of Sh1 from Sh0.8.