Editorials

EDITORIAL: Talk about executive pay

execs

Safaricom CEO Bob Collymore, Coop Bank's Gideon Muriuki and KCB Group's Joshua Oigara. FILE PHOTOS | NMG

For the first time in the history of corporate Kenya, ordinary investors who own shares in public listed companies have had a chance to know what the people they have hired to manage their businesses are paid.

The revelations, which began three months ago, have been surprising as they have been eye-opening.

True to the intentions of the framers of the law, which was to shed light in this very dark corner of modern corporations, publication of executive pay details has afforded business owners a real opportunity to study and understand whether they are getting value for money invested in brain-power at the very top of these companies.

First, is the matter of smaller companies paying chief executives more money than much bigger rivals. Then there is the very important parameter of profitability where, on the one hand, some firms are paying executives what amounts to 60 per cent of annual profits. Some executives have even managed to get huge pay increments while the companies they lead slide into loss-making.

Then there is the fact of the top executive being paid a salary that is more than 100 times the average worker’s pay, to name but a few.

These are issues around which serious conversations must now begin, especially during the annual general meetings.