Kenya’s biggest bank by assets CEO is laughing all the way to the Bank after pocketing USD2.56m in wages
The KCB CEO’s allowances, more than tripled to Sh30 million while his gratuity increased 18 per cent to Sh13 million even as his non-cash benefits remained unchanged at Sh1 million.
According to the bank’s financial report for the year ended December 2017, Mr Oigara was paid Sh256 million ($2.56m), making him one of the best paid executives in Kenya.
The report which comprises comprehensive account of its directors’ remuneration is part of new bank reporting regulation, making KCB the first bank to comply with the directive.
Mr Oigara’s Sh256 million compensation for 2017 means his pay rose 14 per cent from Sh224 million ($2.24m) in 2016, the bulk of it in bonuses.
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Mr Oigara said the compensation is in line with the bank’s policy that ties pay to performance.
“We (KCB), together with Equity Group and an Egyptian bank, have one of the highest RoE (return on equity) on the continent,” Mr Oigara said.
At the current rate, Mr Oigara’s pay amounts to nearly Sh1 million ($10,000) for each working day and is 72.1 times the average Sh3.5 million ($35,000) paid to KCB’s 5,393 permanent employees.
While Sh1 million for each working day may sound like the dream of every employee, Mr. Oigara pointed out that the remuneration of bank executives in East Africa remains way below those of their peers in West and Southern Africa.
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KCB says its executive pay is the sum total of many factors starting from the market average obtained through a regional survey of executive compensation all the way to bonuses that are linked to a range of metrics such as return on equity.
The bonuses are tied to achievement of multiple metrics, including profitability of the group and at all times reflect the bank’s performance in a year.
KCB’s employees are paid a bonus only if they achieve 95 per cent or more in a scorecard of the set targets.
The KCB CEO’s allowances, more than tripled to Sh30 million ($300,000) while his gratuity increased 18 per cent to Sh13 million ($130,000) even as his non-cash benefits remained unchanged at Sh1 million ($10,000).
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The Financial Times places KCB in a peer group of seven banks, including Kenya’s Equity, Co-operative Bank, Oman’s Bank Dhofar, Qatar’s Ahli Bank QSC, Qatar International Islamic Bank QPSC and Morocco’s Marocaine pour le Commerce et l’Industrie Banque SA.
Also read: THIS IS WHAT KENYA'S MOST SOUGHT AFTER PHOTOGRAPHER GETS PAID TO COVER EVENTS AND WEDDINGS
Of the seven, KCB had the highest net income growth rate over the past five years at 10.06 per cent, followed by Equity (9.33 per cent), Co-op (8.11 per cent) and Ahli Bank QSC (6.58 per cent).
In the local market, KCB reported the largest net income of Sh19.7 billion ($197m) in the year ended December, followed by Equity (Sh18.8 billion) and Co-op (Sh11.4 billion).
Equity however leads with an RoE of 20.2 per cent, enabling it to trade at a high premium on the Nairobi Securities Exchange (NSE) where it leads other banks with a market capitalisation of Sh206 billion.
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KCB, whose RoE stands at 18.5 per cent, is second with a market value of Sh165.5 billion ($1.655m).
KCB, however, has the largest absolute cash return of Sh9.1 billion or a dividend of Sh3 per share, followed by Equity’s Sh7.5 billion or Sh2 per share.
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