NSE filings reveal Sh1m monthly pay for chief executive
NSE Chief Executive Peter Mwangi at a past event. File
What you need to know:
NSE will be valued at nearly Sh2 billion on the first day of trading.
The NSE chief executive Peter Mwangi earned an average of Sh1.1 million per month last year representing a 34 per cent jump in his pay over the past five years, regulatory filings related to the bourse’s ongoing IPO have showed.
Mr Mwangi, who took over as CEO of the 60-year old securities exchange in November 2008, received a total pay-out of Sh13.5 million last year compared to Sh10.1 million earned in his first full-year at the helm.
The Nairobi Securities Exchange has recorded a steady growth during Mr Mwangi’s tenure, recovering from a loss of Sh35.8 million recorded in 2009 to last year’s after-tax profit of Sh262.3 million. The NSE’s total assets have climbed 279.3 per cent to Sh1.1 billion from Sh303 million in 2009.
The financial disclosures are made to help investors assess the value of the exchange whose shares are on sale to the public at Sh9.50 apiece. Going by the intended sale of 194 million shares, the NSE will be valued at nearly Sh2 billion on the first day of trading upon conclusion of the ongoing initial public offering (IPO).
Executive compensation has become a material corporate governance disclosure requirement, helping investors to assess the relative productivity of a workforce. The NSE is seeking to raise up to Sh627 million through the IPO and self-list its shares on September 9.
Mr Mwangi, 44, has extensive experience in the financial services industry. He joined the NSE from investment firm Centum where he had been the managing director for four years. He holds a Bachelor of Science Degree in Electrical Engineering from the University of Nairobi besides being a chartered financial analyst.
His tenure coincided with a recovery in the securities market which had seen the benchmark NSE 20-Share Index nearly halve in 2008, weighed down by the global financial crisis and Kenya’s internal political crisis. The index shrank 9.5 per cent in 2009 before rebounding to gain 36 per cent in 2010. The index then plunged 30 per cent in 2011 and recovered to record a 29 per cent growth in 2012.
It extended the rally to gain 19 per cent last year, helped by strong corporate earnings and increased foreign investor inflows.
Mr Mwangi’s term has been marked by introduction of new products and increased efficiency at the bourse. The new products introduced since 2009 include the FTSE NSE Kenya 15 and FTSE NSE Kenya 25 indices that are meant to further guide international investors seeking to participate in the local market.
The bourse also started packaging and selling market data to investors, opening a new revenue stream. The NSE has also helped cut transactions settlement to three days from the previous four days, excluding the day on which a security is traded.
Other significant developments include the automation of trading starting 2011, with plans underway to enable trading of securities through the internet.
Mr Mwangi’s term has also seen ground-breaking deals at the market, including the reverse takeover of publicly traded investment firm City Trust by I&M Bank which was privately held before the transaction that was concluded in June last year.
