EAPCC says in its latest annual report that its board’s compensation rose to Sh48.3 million in the review period compared to Sh23.7 million a year earlier.
The special payment to Mr Tande, expected to include gratuity, was close to his regular annual salary of Sh14.5 million.
The cement manufacturer described the payout as “compensation for loss of office.”
Former East African Portland Cement Company (EAPCC) #ticker:PORT chief executive Kephar Tande pocketed Sh12.8 million in severance pay, a move that contributed to a doubling of the company’s board compensation in the year ended June.
EAPCC says in its latest annual report that its board’s compensation rose to Sh48.3 million in the review period compared to Sh23.7 million a year earlier.
The special payment to Mr Tande, expected to include gratuity, was close to his regular annual salary of Sh14.5 million.
The cement manufacturer described the payout as “compensation for loss of office.”
Mr Tande left the company in August last year after holding the position for nine years and was replaced by Simon ole Nkeri whose pay in the review period stood at Sh13 million.
Mr Nkeri’s contract ends on August 4, 2019, EAPCC said. The report shows that allowances of some members of the EAPCC board also rose by large margins, helping to expand the directors’ total compensation in a year when the company sunk into a net loss of Sh1.4 billion.
Kung’u Gatabaki, an independent director on the board, had his annual pay jump 84.5 per cent to Sh1.3 million in the review period compared to Sh723,000 the year before. William Lay, who chairs the board, also had his pay increase 41.4 per cent to Sh3.4 million from Sh2.4 million.
EAPCC said Mr Lay’s contract was to end on November 16, 2017 and it was not immediately clear whether he got a new term.
Other directors, including Anthony Omerikwa (representing the NSSF) and Sarone oe Sena, had relatively smaller increments of 11.1 per cent and 5.2 per cent to Sh1.2 million and Sh1.1 million respectively.
“The remuneration of all directors is subject to regular review to ensure that levels of remuneration and compensation are appropriate,” EAPCC said in the report.
The cement manufacturer is the latest publicly traded firm to disclose it increased the board’s pay significantly despite posting losses. Human and animal feed manufacturer Unga Group raised its board compensation 49.5 per cent to Sh32 million in a similar period when it made a net loss of Sh32.2 million.
EAPCC’s net loss of Sh1.4 billion reversed a net profit of Sh4.1 billion the previous year, which was largely driven by a property revaluation gain of Sh6.2 billion. The company’s current liabilities overtook its short-term assets by Sh4.2 billion, indicating a liquidity risk.
EAPCC is exploring several major fundraising options to boost its financial health in an increasingly competitive regional cement business that has attracted more players.
These include selling part of its 14,000-acre idle land to the government. The company earlier told the Business Daily it could also concurrently launch a rights issue underwritten by development finance institutions (DFI), which could dilute the Treasury stake in the company, ending its status as a parastatal.
The twin fundraising strategies are expected to be implemented over the medium term and the money will be used to repay debt and invest in new plants and upgrade the existing factory.
The firm says the government will take possession of the land and make provisions in the annual budget to pay the company over the years.
The government could buy parts of the land for itself or for other investors in the proposed call option deal which EAPCC says has an additional advantage of solving the problem of squatters who have laid claim to some of its land.
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