By VICTOR JUMA
Centum Investment’s chief executive James Mworia’s total pay rose 87 per cent to a record Sh375.6million from the year ended March compared to Sh201.1 million the year before, taking his total a few-year pay to nearly Sh1 billion.
The compensation, which extended Mr Mworia’s record as corporate Kenya’s highest-paid CEO, was equivalent to Sh31.3 million per month, according to disclosures from the company’s latest annual report.
The bulk of Mr Mworia’s remuneration is usually made of a performance bonus scheme, whose targets the Centum chief executive along with also also his management team have consistently met through the years, drawing hundreds of millions of shillings in return.
Mr Mworia’s take-home is usually particularly unique from the fact which his monthly salary is usually a more modest Sh2 million or about Sh24 million a year – translating to a little fraction of the annual total remuneration for the 40-year-old executive.
At Sh375.6 million, Mr Mworia’s total remuneration places him ahead of the pay of the chief executives of the a few largest firms by market capitalisation at the Nairobi Securities Exchange, including Safaricom, East African Breweries Limited along with also also KCB Group.
Safaricom’s Bob Collymore along with also also KCB’s Joshua Oigara in December 2015, announced they were on a monthly pay of Sh9 million along with also also Sh4.9 million, adding up to Sh108 million along with also also Sh58.8 million respectively.
Mr Mworia was already doing multiples of the two CEO’s pay by 2012, his compensation having risen sharply when Centum started out reaping the benefits of its big shift coming from passive equities investments to large-scale projects in different sectors of the economy.
The Centum chief executive’s remuneration has grown at an annual compounded rate of 64.6 per cent from the past eight years when the company has also grown its market capitalisation along with also also total assets to stand at Sh28 billion along with also also Sh88.3 billion respectively.
Mr Mworia has excelled at implementing Centum’s earlier decision to invest big in areas such as real estate along with also also fast moving consumer goods, raising debt, selling some assets along with also also structuring joint ventures to fund the capital-intensive projects.
The ventures have grown in value, allowing the company to book multi-billion-shilling gains along with also also ultimately satisfying the bonus payment criteria of clocking a minimum return of 15 per cent on net assets each year.
Centum previously said employees were entitled to 20 per cent of any return above the set benchmark, with the absolute payout also based on individual performance.
The brand new annual report is usually silent on what portion of the excess return accrues to employees, indicating which the level could have changed.
The investment firm beat the hurdle rate by a whisker, allowing the senior management team to book brand new bonuses whose payments is usually spread over several years to encourage them to stick around.
Centum reported a net return of Sh6.3 billion from the year ended March when the opening shareholder funds stood at Sh39.3 billion, representing a return rate of 16 per cent.
This kind of created an excess of some Sh390 million in absolute terms, part or all of which was available for distribution to eligible staff.
Employees of the company had accrued bonuses of Sh716.2 million from the review period compared to Sh987.4 million the year before, doing the workforce of less than 0 one of the highest-paid from the country.
“The group has in place a performance bonus scheme. The scheme rewards employees of the group based on achievement of certain set benchmarks of business success,” Centum said from the report.
“The group’s performance bonus scheme is usually designed to enable achievement of consistent business growth which is usually tied to the increase in shareholder wealth, which is usually the primary business objective. A hurdle rate of 15 per cent annual increase in return based on the opening shareholder funds has been set.”
The bonus is usually payable in three equal installments over three years, with accrued payouts continuing only if the net asset value is usually maintained or increased coming from the prior year.
The acquisitive company has racked up major fair value gains during Mworia’s tenure, with these standing at a cumulative Sh24.1 billion from the year ended March across subsidiaries including Two Rivers Development (which partly owns the Two Rivers Mall) along with also also Coca-Cola bottler Almasi Beverages.
Source – Nairobi News
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Meet the CEO who earns Sh1 million a day