Standard Bank last year paid its top six executives a combined R209 million in salaries, bonuses and other benefits, with group head of corporate and investment banking David Munro netting more than the companies joint chief executives in the 2016 financial year.The bank’s annual report on Friday showed that Munro took home R45.2 million in total earnings for the year, a big jump from the R31.8 million he earned last in 2014. In 2014, the six executives received R190 million.
Munro’s earnings included a basic salary of R6.7 million, annual cash reward of R12.9 million, annual deferred award of R15.6 million and R10 million in performance reward plan. Standard Bank joint chief executives, Sim Tshabalala and Ben Kruger, followed suit with each earning R44.4 million for the year.
Group head of personal and business banking Peter Schlebusch scored a total package of R41.8 million during the period.
These figures, however, pale in comparison when measured against the R100 million earned by outgoing Shoprite chief executive Whitey Basson last year. Basson’s pay cheque included R49.7 million basic salary and R50 million in one-time performance related bonus
The King IV Report on Corporate Governance recommended the tightening of requirements on remuneration for companies.
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Leon Louw, a director at Free Market Foundation, said that what was important was that the remuneration of executives was determined ultimately by the shareholders, and not by the executives themselves. “If the executives were able to increase the company’s profits substantially, the shareholders would only be happy to pay them enough to keep them at their company. The amount the executives get is irrelevant, what is important is that they get paid what they are worth,” Louw said.
Munro’s department delivered the strongest performance in the group during the period under review, contributing a 16 percent increase year-on-year in profits to R10.5 billion on the back of revenue of R35.2 billion. The department has in the past year been involved in some landmark transactions.
It acted as financial adviser and transaction sponsor to Anheuser Busch Inbev (AB InBev) on its R3.1 trillion secondary listing on the JSE.
The acquisition of SABMiller by ABInBev was the third largest merger in corporate history and the largest-ever merger and acquisition transaction in the consumer goods sector.
It then advised Dis-Chem on its initial public offering (IPO) on the local bourse. According to PricewaterhouseCoopers Dis-Chem’s $305 million (R4 billion) IPO was the best on the continent last year.
Standard Bank’s remuneration committee chairperson Peter Sullivan said Munro’s department delivered a very strong set of results in the period and the committee decided to reward him with 9.6 percent increase in short-term incentive of which 55 percent was deferred for up to 3.5 years, while his total remuneration grew by 6.9 percent.
Standard Bank’s total profits for the year grew by a modest 4 percent to R23 billion in the period while subsidiary Liberty saw its fortunes slumping 46 percent during the period.
Liberty’s earnings attributable to the group were R955 million for 2016, down 61 percent on the prior year. Standard bank holds a 55 percent interest in Liberty.
Theo Botha, a shareholder activist, said that if executive pay was according to the key performance indicators the company had set, then all was above board.
BUSINESS REPORT