Firm says its managing director Christopher Flowers and finance director Ketan Shah draw no direct benefits from the company.
The Companies Act requires listed firms to disclose remuneration of each director, including salary, allowances and bonus where applicable.
Kakuzi did not specify which of its affiliates are paying its executives directly.
Agricultural firm Kakuzi #ticker:KUKZ says its executive directors are paid by subsidiaries owned by its majority shareholder Camellia Plc, an arrangement that has seen it sidestep new compensation disclosure rules.
The Nairobi Securities Exchange-listed firm says its managing director Christopher Flowers and finance director Ketan Shah draw no direct benefits from the company.
Kakuzi, however, stated its total key management compensation as Sh48.4 million in the year ended December and it was not immediately clear whether this is the amount it was charged by companies in custody of the executives’ payroll.
The Companies Act requires listed firms to disclose remuneration of each director, including salary, allowances and bonus where applicable.
“The managing director and the finance director are the only executive directors of the company. They have service contracts with fellow subsidiary companies within the parent company, Camellia Plc Group on rolling service contract basis, which are terminable at any time by a three months period of notice,” Kakuzi says in its annual report.
“Their remuneration is dealt with within the service contracts of those fellow subsidiary companies.”
Kakuzi did not specify which of its affiliates are paying its executives directly. UK-based Camellia’s other subsidiaries in Kenya include Eastern Produce Kenya and Lintak Investments.
There have been varying levels of transparency in directors’ remuneration disclosures among NSE-listed firms, with BAT #ticker:BAT currently having the most detailed reporting among the publicly traded firms.
The Capital Markets Authority (CMA) has said that it is not the entity tasked with policing compliance with the Companies Act.
“Please also note that the Authority is not the regulator for purposes of ensuring compliance with the Companies Act,” the CMA told the Business Daily in a statement.
The regulator added that it has not prescribed the format of disclosure of director’s remuneration.
Each director who knows that a company has published a remuneration report that does not comply with the requirements of the Companies Act is liable to a fine not exceeding Sh1 million.
The pay disclosures are meant to promote accountability, including by allowing shareholders to measure directors’ remuneration against their performance.
