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Co-op Bank CEO Muriuki to earn Sh103m dividend

Gideon Muriuki.
Co-operative Bank Group chief executive Gideon Muriuki. FILE PHOTO | NMG 

Gideon Muriuki, the Co-operative Bank chief executive, will earn Sh103 million as dividend from the lender, cementing his position as the best paid executive among his peers leading listed companies.

The bank's shareholders are set for Sh1 per share dividend, up from Sh0.80 paid last year on the back of an 11.6 per cent rise in net profit to Sh12.7 billion for the year ended December.

This will earn Mr Muriuki Sh103.8 million from his 1.77 per cent stake in Co-op Bank.

The stake also makes him the second-largest shareholder in the lender after the Co-operative Movement, which owns 64.5 per cent.

The millions of shillings in dividend will be on top of his CEO package, which last year emerged as the largest among firms listed on the Nairobi Securities Exchange (NSE).

Co-op Bank paid Mr Muriuki a total of Sh370 million in the year ended December 2017 — Sh99.8 million in salary and allowances and a Sh270.7 million bonus.

The pay was equivalent to more than Sh1 million per day.

Mr Muriuki’s 2017 pay was also more than five times the Sh60.4 million that Equity Bank’s CEO, James Mwangi, earned and Sh100 million more that of Joshua Oigara, the chief executive of Kenya’s largest bank KCB , whose pay stood at Sh256 million.

Paper billionaires

The listing of the bank on the NSE in 2008 ushered Mr Muriuki into the club of paper billionaires in a period when going public underlined the exchange as the shortest route to riches in Kenya.

The bank share’s current pricing at Sh15.55 means Mr Muriuki’s stake in the bank is worth Sh1.61 billion.

The big bulk of the shares held by Mr Muriuki have their roots in a 2007 scheme that saw the shareholders allocate a portion of the issued shares to the company for purposes of setting up an “employee retention scheme”.

Mr Muriuki bought half of the shares that had been set aside for allocation to directors and top executives.

He was hired in March 2001 to turn around the bank, then a loss-making operation. Mr Muriuki reported the lender’s first net profit of Sh164.7 million in 2002 and elevated the lender to Kenya’s third-largest bank.

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