Co-operative Bank of Kenya raised the bonus of its chief executive Gideon Muriuki by 7.9 percent to Sh287.5 million in the year ended December when the lender posted record earnings and dividend payout.
His bonus rose from Sh266.4 million the year before, marking a Sh21.1 million increase in absolute terms.
The lender said the remuneration of its chief executive is in line with the performance-based reward system that applies to all employees.
“The bank is now the largest Co-operative Bank in Africa, and 5th largest company by market capitalization at the Nairobi Securities Exchange,” the lender says in its latest annual report that disclosed the compensation of its top leadership.
“A key pillar of this transformation has been the board of directors successfully implementing a performance-based bonus reward system applicable to all staff, both management and unionized staff,” added the company.
Co-op Bank noted that individual salary review or increase and the bonus award each year is directly linked to the attainment of set profitability performance targets.
Mr Muriuki’s salary also rose by a nearly similar margin at 7.6 percent to Sh140.7 million in the review period.
The salary increased by Sh10 million from Sh130.7 million the year before. Co-op Bank’s net profit rose by a third to Sh22 billion in the year ended December, helped by a surge in interest and non-interest income.
The lender declared a record dividend of Sh1.5 per share or a total of Sh8.8 billion, which will be distributed on June 9 to shareholders on record as of May 24.
The payout marks a 50 percent increase from the previous year when it declared and paid a dividend of Sh1 per share or an aggregate of Sh5.8 billion.
The lender’s long-term shareholders such as Co-opholdings Co-operative Society Limited, with a controlling 64.56 percent stake, now earn more in dividends per annum than the capital they invested in the business.
Co-op Bank benefitted from a 32.6 percent growth in non-interest income to Sh25.7 billion. Total interest income also jumped 10.9 percent to Sh61.7 billion, contributing to the bottom line.
The loan book expanded 9.4 percent to Sh339.3 billion while investment in government securities fell 5.8 percent to Sh173.2 billion.
Despite the reduction in treasuries, interest income from the securities increased to Sh20.8 billion from Sh18.7 billion.
Co-op Bank’s 2022 results continued its streak as one of the top-performing publicly traded banks.
Its return on average assets (ROA), a measure of management effectiveness, rose to 3.7 percent from three percent in 2021.
