Equity CEO pay climbs to Sh65m on non-cash perks

Equity Group’s #ticker:EQTY chief executive James Mwangi saw his compensation rise 7.7 percent to Sh65.1 million in the year ended December after receiving non-cash benefits.

This is according to the lender’s disclosures of its directors’ remuneration in the annual report. Mr Mwangi was paid Sh60.4 million in 2018.

Equity is the second major bank to announce the compensation of its top leadership after KCB Group #ticker:KCB which said its CEO Joshua Oigara earned a total of Sh299.1 million in the year ended December.

“The executive directors’ remuneration package comprises core fixed elements (base salary, pension and other benefits),” Equity said in the report.

“Executive directors are eligible to participate in the group’s bonus scheme, which is anchored on achievement of key business performance indicators, but are not entitled to earn fees or other allowances.”

Mr Mwangi’s pay in the review period comprised a salary of Sh56.7 million (Sh4.72 million per month), non-cash benefits (Sh4.7 million), other allowances (3.7 million) and pension (Sh2,000).

In the previous year, he earned a salary of Sh56.7 million (4.72 million per month) and allowances of Sh3.7 million.

He did not receive bonuses in the two years despite the bank’s increased profitability. Equity does not give details of the performance measures that would trigger bonus payouts for its executives. The bank reported a Sh22.5 billion net profit for the year ended December, a 13.8 percent jump from Sh19.8 billion a year earlier.

The bank benefited from higher interest income and fees derived from transactions.

Net interest income, including from loans and advances to customers, increased by 8.6 per cent to Sh44.98 billion.

Its loan book expanded 23 per cent to Sh366.4 billion while investment in securities like government debt paper increased seven per cent to Sh172.2 billion.

The bank’s net fees and commission income rose 13 per cent to Sh17.1 billion.

Lenders’ earnings this year are set to fall due to the coronavirus disruption that has has reduced demand for loans while increasing defaults in repayments.