Kenya's cash-strapped miller is planning to lay off more workers to cut costs but is paying its board more than double
Despite the miller’s financial books being in the red year in year out, its directors are among the most highly paid directors in state-owned firms.
Mumias Sugar is set for another round of staff retrenchment this year, even as its board directors pocketed millions of shillings and their pay more than doubled to Sh28.4 million ($284,000) in 2017.
The Nairobi Securities Exchange-listed firm paid its directors Sh12.4 million ($124,000) in the year ended June 2016, according to its latest annual report which reveals the sharp rise in board emoluments.
The figure excludes compensation to its CEO Nashon Aseka whose pay was not disclosed and may be even higher.
The company which is in deep financial troubles and is starring at insolvency after three commercial banks recall Sh2.6billion ($25.4m) while having no trouble giving its directors a major pay increase, is now planning to lay off tens of its employees to cut costs.
“The company is committed to implementing an optimal staff restructuring programme in order to derive tangible savings on costs to realise higher productivity from a leaner and more efficient workforce,” the company says in its latest report.
Mumias says its staff count dropped by 200 in the financial year to June 2017, partly helped by natural attrition.
Only a few of the company’s eight directors had served for two full years ended June 2017, with others having resigned, retired or joined midway.
The eight directors listed on the firms website are Mrs. Nancy Kaminchia, Mrs. Joanne Tabuke, Mr. Abraham Koech, Ms Naomi Cidi Kumbatha, Mrs. Patricia A. O. Adala, Mr. Nelson Orgut and Mr. Peter K. Ingosi.
Fees and allowances paid to most of the board members, however, went up significantly leading to the higher total pay.
Kennedy Ngumbau, the chairman, for instance was paid a total of Sh5.7 million ($57,000) or 25 times higher compared to Sh228,572 ($2,231) the previous year when he had not ascended to the role of chairman.
Despite the miller’s financial books being in the red year in year out and needing constant bail out from the government, its directors are among the most highly paid directors in state-owned firms.
The chairman is paid a fee of Sh600,000 ($6000) yearly and a monthly allowance of Sh500,000 ($5000).
He is also paid a sitting allowance of Sh78,571 ($766) for each meeting and claims mileage at a rate of Sh92 per kilometre.
Other directors earn a fee of Sh500,000 ($5000) per year, an allowance of Sh57,143 ($570) per sitting and claim mileage at a rate of Sh92 per kilometre.
The company has in the last two years received a total of Sh3.1 billion ($30m) from the Treasury, as part of government efforts to revive operations and steer the miller back to profitability.
In 2017, It recorded a full-year net loss of Sh6.8 billion ($66.4m) which is more than the Sh4.8 billion ($46.9m) loss the company recorded for the previous year and Sh4.6 billion ($44.9m) loss made in the year to June 2015.
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