CIC Group’s chief executive, Tom Gitogo, was paid a total of Sh73.2 million in the year ended December, the insurer has disclosed in its latest annual report.
Mr Gitogo’s compensation rose seven per cent from Sh68.4 million the year before. The company says its remuneration levels takes into account business performance and is also aimed at attracting and retaining the best talent.
“To retain and motivate such individuals requires compensation that is not only commensurate to their skill and time devoted to the company, but also competitive,” CIC said in the report.
“The group has developed and put in place a remuneration policy for both the executive and non-executive directors that is transparent and considers the business needs and the overall performance of the business.”
Mr Gitogo earned a salary of Sh52.1 million or Sh4.3 million per month in the review period when he was also paid allowances of Sh21 million.
His salary stood at Sh47.4 million or Sh3.9 million per month the previous year when he earned allowances of Sh20.9 million.
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Mr Gitogo did not get a bonus in the two years, having failed to hit the set targets.
“The remuneration for the executive director is as per a negotiated contract of employment.
It incorporates a bonus scheme that is only triggered upon achieving various targets agreed with the board. The trigger was not reached in 2016 and 2017,” CIC said.
The company’s combined ratio, a measure of profitability in the mainstay insurance business, stood at 119.2 per cent and 117.7 per cent in 2016 and 2017 respectively.
This means its expenses and claims are running ahead of net premiums, resulting in underwriting losses that it has had to offset from other business lines including investments.
Its overall net earnings rose 2.5 times to Sh478.4 million in the year ended December when fees and commission income, for instance, surged 57 per cent to Sh1 billion.
Mr Gitogo, whose contract runs until April 2020, has a gratuity of 31 per cent of basic pay at the end of the contract for each year worked.
The contract has a three months termination notice.