It’s a popular idea that if you want to make big money, you have to quit your job and start your own business. Most investment gurus will tell you that you can’t grow rich on a salary alone. But then many of the chief executives of listed companies in Kenya disprove this idea – they’re banking millions of shillings a month, with a chunk of this cash coming from bonuses. They’re reaping the benefits of applying their specialised skillset to improving the performance of their companies – most of them in the financial and investment sector – in the midst of a tough economic environment. Chief executives make the bulk of their money through bonuses, with their basic pay being just a fraction of the total cash they receive.
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In 2018, the latest period for which full-year financial results are available, Co-operative Bank CEO Gideon Muriuki emerged the best-paid employee in the country, at least going by disclosures the listed lender made in its report to shareholders. He earned Sh376.4 million – this comprised a bonus of Sh271 million and a salary of Sh105.4 million. Centum CEO James Mworia, however, went without a bonus in the year to March 2019, which consequently saw his annual remuneration dip 75 per cent to Sh45 million. In the year to March 2018, he took home Sh177 million. And in the year before this, he earned Sh211.48 million – which translated to Sh17.6 million a month, or Sh600,000 a day The idea of paying chief executives well, with the bulk of their pay coming from performance-pegged bonuses is global practise.
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Boeing Company’s ousted CEO Dennis Muilenburg, for instance, is leaving the company with Sh6.2 billion ($62 million) in compensation and pension benefits, but will receive no severance pay in the wake of the 737 Max crisis. A look in to the pay of South Africa’s chief executives reveals a similar trend, where the best-performing companies gift their CEOs hefty bonuses and generous pay packages. For instance Absa, one of the largest banks in South Africa, paid it CEO Sh297 million (29.7 million rand) – which comprised of Sh140 million in basic pay, and short-term incentives (that […]