Most reporting entities are finding it hard to come clean on this matter and are therefore testing the vigilance and determination of the regulator to enforce compliance during this reporting season.
The season of corporate reporting is once again here and all eyes are on how public listed companies will comply with the new rules on reporting of directors’ remuneration.
The regulations, which came into force late last year following their gazettement require that reporting entities disclose each directors pay, including the total sums paid in bonuses, salaries and allowances for the financial year preceding the relevant financial year.
We are only at the beginning of the reporting period and yet there are signs of gross violation of the reporting regulations — with a number of reporting entities using all tricks in the book to retain the cover of darkness that has characterised executive compensation in Kenya.
One thing is clear. Most reporting entities are finding it hard to come clean on this matter and are therefore testing the vigilance and determination of the regulator to enforce compliance during this reporting season.
While the onus of doing the correct thing lies with the reporting entities, their failure to comply with the new regulations to achieve the intended purpose of allowing shareholders to fully understand the level, justification and context of directors’ compensation is likely to harm the regulators more.
It will be the clearest test of the power balance in which those refusing to comply will be the winners.
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Note: The results are not exact but very close to the actual.
