Managing Director of Republic Bank Ghana, Farid Antr, says calls by the Central Bank for commercial banks to publish compensations of executives is a right call.
This directive by the Bank of Ghana, he adds, is replicated in international banking business.
In an exclusive interview with Ghanaweb, Farid stated that there is a need for shareholders to ensure that executive compensation is aligned with bank performance.
In his words, “it is actually an international corporate standard. In your publication you are supposed to publish remuneration of the executives. Some groups publish as a group or individuals. I think it is important to publish and we are in support of it.”
The Bank of Ghana has indicated its resolve to scrutinize compensation package policies of universal banks to ensure that remuneration for key management personnel including Chief Executive Officers are linked to the performance of the banks and quality of its assets.
The Governor of the Central Bank, Dr Ernest Addison, addressing journalists at the 91st monetary policy press briefing, added that “to ensure transparency, banks will be required to publish Value Added Statements disclosing details of the compensation packages of key management personnel and Boards of Directors separately from total employee compensation”.
Executive compensation in the banking sector has come under intense scrutiny around the world.
In Ghana, several critics argue that this was a contributory factor to the challenges which led to the meltdown in the banking sector.
The move by the Bank of Ghana to get universal banks to link compensation of bank executives with the overall performance of the bank is expected to ensure these executives earn their salaries as it is with all other employees of the bank.