Directors of State corporations are set to get a monthly pay increase of up to 87.5 per cent in a new plan signed off by the Treasury, putting into doubt the government’s commitment to tame its runaway wage bill.
Treasury secretary Henry Rotich has issued a memo that will see board chairpersons, who have been earning honoraria at a flat rate of Sh80,000 per month since July 2005, get between Sh100,000 and Sh150,000 beginning July 1.
The new rates are in line with a grading system adopted by the Salaries Review Commission (SRC) in October last year upon conclusion of public sector job evaluations.
Mr Rotich has in the notice directed State agencies to adopt the new grading system and pay structure, boosting the allure of State corporations that have traditionally provided a soft landing for politicians who fail to secure elective posts.
“State corporations should review their salary structures in line with the SRC model salary structures and seek Treasury’s concurrence before implementation,” Mr Rotich says in the memo dated December 7, which is meant to guide parastatal chief executives on their 2018/19 budget preparations.
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The new pay structure, while intended to attract highly qualified professionals to State corporations, could further raise the public wage bill that currently consumes half of the national tax revenue.
“A copy of the salary structure agreed with SRC should be attached to support remuneration costs in the budget proposal,” says the Treasury minister.
The new structure classifies the pay to chairpersons of State corporations in three categories.
The chairpersons of the Central Bank of Kenya, the Kenya Revenue Authority, Kenya Power #ticker:KPLC, the Kenya Ports Authority and the Kenya Airports Authority will be among the top earners, drawing retainers at the rate of Sh150,000 per month.
Others in that category are heads of KenGen #ticker:KEGN, the National Oil Corporation, the Kenya Pipeline Company and Kenyatta National Hospital boards.
The middle category, which includes the board members of East Africa Portland Cement, Geothermal Development Company, Kenya Electricity Transmission Company (Ketraco), Kenya Re and the National Housing Corporation, will get monthly retainers at the rate of Sh120,000 per month.
Board chairpersons of Kenya Railways, Industrial and Commercial Development Corporation, Posta, the Capital Markets Authority, the Export Processing Council, the Commission of Higher Education, the Kenya Bureau of Standards (Kebs), the National Social Security Fund (NSSF), the National Hospital Insurance Fund (NHIF) and the Retirement Benefits Authority are also in that category.
Others are the National Social Insurance Fund Trustees, the National Council for Population and Development, Kenya National Bureau of Standards, Kemsa, KeNHA, Moi Teaching and Referral Hospital, the Kenya National Examinations Council, Kenya Plant Health Inspection Services, the Kenya Tourism Board, the ICT Authority, the Kenya Urban Roads Authority, the Kenya Institute of Curriculum Development and the Agriculture and Food Authority.
Chairpersons of the rest of the State corporations have been put on a monthly retainer of Sh100,000 each.
In addition to the monthly retainers, each of the chairpersons, irrespective of parastatal category, will also earn sitting allowances at a higher rate of Sh25,000, up from Sh20,000 per sitting at the moment.
The new pay structure also raises accommodation allowance of chairpersons to Sh18,200 per day, up from Sh10,000.
At the same time, board members who are being paid only when they have official business at the moment are set to be put on monthly retainers.
The top paying parastatals will give directors retainers at the rate of Sh80,000 per month with the second category paying Sh70,000 while the lowest paying agencies will give their directors Sh60,000 per month.
The new SRC pay structure has also retained the Sh20,000 sitting allowance which they earn at the moment while their accommodation allowance will rise to a uniform Sh18,200 per day across the categories, up from Sh10,000 at the moment.
Other monthly allowances, including Sh5,000 for airtime, Sh2,000 per day for lunch, personal accident insurance cover and medical expense, remain at current rates.