Shareholders are reacting to the sporadic increase in the earnings of managing directors/chief executive officers of Nigeria’s money deposit banks even as banks profits continue to nosedive following the spectre of non-performing loans, shortage of foreign exchange, naira volatility and other economic headwinds..
The Shareholders are therefore are calling for a review.
According to investigation by Sunday Sun, eight of the CEOs earned between N902.9 million and N1 billion last year, which shareholders said was not in sync with current economic realities in the country. Others, however, believe that their current earnings are not overboard considering their contributions to the growth of their respective banks.
A breakdown of the earnings showed that the MD/CEO of Union Bank plc, received the highest salary of N208 million in 2015, representing 36 percent or N55 million increase from N153 million earned in 2014.
Guaranty Trust Bank (GTBank) paid its MD/CEO, a whopping N204.9 million as salary last year, up by 12 percent or N22 million from the N183 million he received in 2014. The CEOs of UBA and Fidelity Bank came third and fourth in earnings with N125 million and N102 million in 2015 respectively, up from N116 million and N94 million in 2014.
Others are FirstBank-N90 million, Zenith Bank-N78 million, Wema Bank-N70 million, and Diamond Bank-N25 million. Most of the banks recorded losses in their first quarter of 2016 unaudited results presented to the Nigeria Stock Exchange.
Reacting on this development, Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, noted that it was necessary to pay bank chiefs and their executives well, in order to prevent them from stealing depositors money, and also in view of the amount of work they have to do to generate earnings for their banks.
According to him, if the banks’ executives are well paid, the temptation of stealing depositors’ money will not arise. However, considering the economic downturn, I think the banks can equally cut the package they take home to reflect the present economic realities. “If states, governors and ministers are cutting their salaries, I think the banks should equally follow suit,” Okezie said.
“There are some allowances for banks’ executives that need to be cut down or completely removed. It is time for companies to tighten their belts given the global oil price fall which has affected the country’s income. So, if the economy picks up, banks can review the packages paid to their executive directors,” he pointed out.
Also, Chairman, Proactive Shareholders Association of Nigeria (PROSAN), Mr. Taiwo Oderinde, said the huge money paid to directors was unfair to shareholders.
Taiwo explained that the banks’ executive compensations are really on the high side when compared to other countries, stressing that the executive directors of banks are given all kinds of allowances at the expense of depositors and shareholders.
According to him, “we do react on this issue when we attend Annual General Meetings (AGMs). In some cases, we refuse to approve their remunerations and ask them to go back and review it.”
On his part, Chairman, Renaissance Shareholders Association of Nigeria, Ambassador Olufemi Timothy, said:“The banks’ executive emolument is not too much considering the earnings they make for the bank. These are people who toil all day and night to see that depositors’ money is kept safely. So the high risk element should also be another great reason why they should be paid well. Even foreign exchange, (forex ) are kept by these banks, so they should be paid well,” he said.