Directors of Carbacid Investments #ticker:CARB got a 7.8 per cent pay rise in the year ended July when the company’s net profit dipped 6.1 per cent, marking the latest in a string of publicly traded firms that have increased board member fees despite weaker earnings.
The Nairobi Securities Exchange-listed firm disclosed in its latest annual report that it paid Dennis Awori (chairman), Maina Wanjigi, Baloobhai Patel and Mukesh Shah an aggregate of Sh12.3 million in the review period.
The directors were paid Sh11.4 million the year before.
The comparisons exclude fees paid to Susan Mudhune who joined the board last July and Robert Shepherd who passed away in December 2016 and was previously the highest-paid director at an annual fee of Sh5.4 million.
Mr Awori got the highest pay rise of 18.3 per cent to Sh3 million in the year under review, followed by Mr Wanjigi whose compensation increased 4.9 per cent to Sh3.8 million.
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The fees for Mr Patel and Shah jumped 4.6 per cent to Sh2.7 million each.
“It is the company’s policy to fairly remunerate directors for the role and responsibilities that they undertake for the group and company,” Carbacid said in the report.
“The remuneration is determined by the board nomination, remuneration and governance committee by reference to market forces.”
Carbacid is the latest publicly traded firm to disclose it increased the board’s pay despite weaker financial performance.
Human and animal feed manufacturer Unga Group #ticker:UNGA raised its board compensation 49.5 per cent to Sh32 million in the year ended June when it made a net loss of Sh32.2 million.
The board pay of East African Portland Cement Company #ticker:EAPCC doubled to Sh48.3 million in a similar period when the company sunk into a net loss of Sh1.4 billion.
Carbacid’s board has been dominated by directors who own significant shareholding in the company, with the carbon dioxide manufacturer recently moving to add outsiders.
Mr Patel, for instance, is the largest single shareholder with a 30.41 per cent stake.
Mr Wanjigi, who recently sold shares worth more than Sh3 million, retains a 2.1 per cent interest in the company.