The CEO pay of State-owned firms listed on the Nairobi Securities Exchange (NSE) trailed the executive salaries of their private sector counterparts.
Regulatory disclosures revealed that managing directors of KenGen #ticker:KENGEN, Kenya Power #ticker:KPLC and East Africa Portland Cement Company (EAPCC) earned less than 10 per cent of what top earners like KCB #ticker:KCB chief executive Joshua Oigara earned last year.
The parastatals pay ranged between Sh1.15 million and Sh2.2 million, which paled in comparison to the monthly salary range of Sh4.5 million and Sh22.98 million that their NSE peers earned.
Kenya Power paid its CEO an average of Sh1.1 million based on what it paid former boss Ben Chumo before he exited in January last, at the middle of the financial year that ended in June.
In the same period, East African Portland Cement CEO Simon ole Nkeri earned Sh1.18 million monthly while KenGen paid its departing CEO, Albert Mugo, an average Sh2.2 million monthly in salary and other benefits.
While boards set executive pay, firms where the government has majority stake have another layer of approval from the Salaries and Remuneration Commission (SRC) — which controls public sector pay.
“The lower CEO pay in parastatals is purely an effect of SRC control rather than the ability of the firms to afford,” said a source at PricewaterhouseCoopers (PwC).
“How do you explain less profitable firms and of less strategic interest to the country paying less than Kenya Power?”
Kenya Power CEO’s pay last year was about 21 per cent of the of the Sh5.3 million average monthly benefit earned by Housing Finance boss Frank Ireri last year despite the mortgage firm dwarfing the utility in sales and profit.
Housing Finance posted a net profit of about Sh126 million last year in a period that Kenya Power posted earnings of Sh7.27 billion.
Mr Oigara remains the top earner among the listed firms that have disclosed CEO pay.
Mr Oigara earned an average of Sh19.8 million monthly last year in basic pay and bonuses.
KenolKobil’s David Ohana earned an average of Sh12.6 million per month, Standard Chartered Bank’s Lamin Manjang (Sh8.7 million), Liberty Kenya’s chief Mike du Toit (Sh8.04 million) and CIC’s Tom Gitogo (Sh6.1 million).
The new company law requires public listed firms to disclose directors’ remuneration and the basis of such payments in annual financial reports.
This is a departure from the past when board pay was lumped together, which made it difficult to know each directors compensation.