Ex-CIC boss Gitogo paid Sh154m on early exit

Former CIC Insurance Group #ticker:CIC chief executive Tom Gitogo was paid Sh154.4 million when he cut short his employment contract on October 9, 2019, the insurer has disclosed in its annual report.

The payout included Sh76.3 million in gratuity which was calculated at 31 percent of the annual basic pay for each year worked.

For the nine months he had served by the time of his departure, he was paid a salary of Sh55.3 million annually or Sh6.1 million per month and allowances running into Sh22.8 million annually.

In the previous full year (to December 2018), the two pay items had earned him a total of Sh74.8 million.

Mr Gitogo’s five-year contract was to end in February this year but he left before the end of his term for unexplained reasons.

The company appointed Elijah Wachira to replace him in an acting capacity.

Mr Gitogo joined CIC in 2014 when he replaced Nelson Kuria who retired after holding the chief executive position for many years.

He left days after the company repaid its Sh5 billion corporate bond on October 2, 2019.

Mr Gitogo had also initiated plans to sell the insurer’s 712 acres of freehold land. His term at CIC was turbulent, characterised by business decline across various performance measures.

The insurer’s market capitalisation, for instance, dropped 68 percent from Sh25.1 billion in December 2014 to Sh8 billion by the time he exited.

Mr Gitogo steadily bought the company’s shares and still held 11 million shares by December 2019 when he was ranked ninth among the top 10 shareholders, according to the annual report.

The shares are currently worth Sh26 million, assuming he has not sold his stake.

Over his tenure, CIC’s earnings and shareholder funds also dropped, partly due to losses at its regional subsidiaries, competition and the weak stock market. After his exit, the insurer reported a Sh321.5 million net profit for the year ended December, representing a 33.1 percent decline from Sh480.9 million the year before.