From left: BAT Kenya chairman George Maina, managing director Beverley Spencer-Obatoyinbo and Finance director Sidney Wafula during release of the firm’s 2017 full year results in February. PHOTO | SALATON NJAU | NMG
BAT appears to have borrowed the detailed remuneration disclosures from its London-based parent, which reserves about 10 per cent of its annual report on the subject.
BAT paid its new chief executive Beverly Spencer-Obatoyinbo a total of Sh37.6 million in the eight months ended December 31, 2017.
Firm says its executives are offered bonuses and shares in the parent company upon attainment of set targets.
British American Tobacco (BAT) Kenya #ticker:BAT has raised the bar in executive pay reporting with publication of a detailed account of what it paid its directors last year and the performance parameters against which their pay is measured, making it the first publicly traded company to do so.
The cigarette manufacturer appears to have borrowed the detailed remuneration disclosures from its London-based parent, which reserves about 10 per cent of its annual report on the subject.
KCB #ticker:KCB and Equity #ticker:EQTY, the other public listed companies that have so far reported directors’ remuneration under the new reporting rules, made no reference to the standards used to remunerate their executives.
BAT, which paid its new chief executive Beverly Spencer-Obatoyinbo a total of Sh37.6 million in the eight months ended December 31, 2017, says its executives are offered bonuses and shares in the parent company upon attainment of set targets.
Other listed firms have so far demonstrated that they are at best obeying the letter of the law, but not the spirit, and have steered clear of telling shareholders what outcomes are expected of the executives.
Also largely ignored has been the requirement that public listed companies disclose the criteria use to set executive pay, evaluation of the previous year’s performance and the chosen performance benchmarks, if any – leaving the boards of directors as the sole custodians of this information to the exclusion of minority shareholders.
Markets such as the US have more rigorous pay disclosure and accountability rules that require companies to specify what will entitle executives to larger salaries or more shares besides mechanisms for clawing back pay from employees who expose their company to unacceptable losses.
Local listed firms have only stated that they try to make sure their executives’ remuneration is competitive based on market surveys of what their competitors and peers are paying for top talent.
In bucking the trend, BAT says its executives are paid a bonus when the company’s market share grows by 20 per cent and operating profit rises 40 per cent.
