Bank chiefs enjoy double-digit pay rise
Posted Thursday, June 28 2012 at 22:03
Kenya’s top bankers enjoyed double-digit rise in their salaries last year as the lenders moved to reward executives they need to stay ahead of the competition.
Industry data show that executive directors’ wage bill of Standard Chartered, Barclays, Equity, and KCB Group increased by an average of 24.7 per cent in 2011 in a year the lenders saw their profits increase 20.6 per cent.
Co-op Bank is the only top banker whose executive pay dropped 21 per cent to Sh56.5 million that analysts linked to its smaller management team last year compared to a year earlier.
Analysts link the rise in executive pay to the sector’s increased profitability and need to reward and retain their top talent.
“The double-digit rise among banks’ executives’ pay is being driven by a high demand for their talent as competition in the industry heats up,” said David Muturi, the executive director of the Kenya Institute of Management.
In the new economy, banks and capital markets are developing good business ideas that are being copied with speed, forcing employers to constantly be on the lookout for innovators.
This type of thinking is making human capital the most sought after resource in the production system and an arsenal for companies that seek to grow.
In top demand are people who are technologically literate, globally astute and capable of not only developing but also executing strategy.
As a result, the top banks are keen to retain star talent and this is forcing the employers to increase fixed salaries and widen the scope of performance-related compensation to include bonuses and shares.
The executive directors’ pay at Standard Chartered increased the widest to Sh115.5 million compared to Sh80.1 million the previous year, reflecting a rise of 44.1 per cent.
The bank had four executive directors last year, including chief executive Richard Etemesi, Kariuki Ngari (director of consumer banking), Chemutai Murgor (chief finance officer) and Segun Odusanya who quit in June as director of origination and client coverage and was replaced in January by Robin Bairstow.
The larger executive pay came as the bank reported an 8.5 per cent net profit growth to Sh5.8 billion from Sh5.3 billion, making it the slowest profit increase among the top five lenders.
This saw the bank cut its dividend payout to Sh11 per share from Sh13.5 per share.
Executives at Standard Chartered and Barclays enjoy a larger pay compared to most of the local banks since their package is linked to salaries of directors set by their head offices standards and talent trends in home countries.