ABSA chief executive Maria Ramos, who earlier this month gave up her cash bonus for last year, may be entitled to about R19 million of other payouts by the end of March.
Deferred share incentive awards announced over the past three years may total about R11m when they vest at the end of this month and dividends are accrued, according to Bloomberg calculations, using Absa’s average February stock price of R166.
Ramos may also be paid R8m in cash and shares in March as part of a 2010 programme to retain senior managers.
The performance conditions for the deferred incentives had been met, an Absa spokesman said last week. The retention awards were subject to approval by the bank’s compensation committee, which was due to meet on March 14, the spokesman said.
Ramos announced that she was forsaking her cash bonus after she described Absa’s 2012 earnings as “disappointing” on February 12.
While home loans soured and full-year profit declined 13 percent to R8.39 billion, part of Ramos’s remit as chief executive is to implement the longer-term strategy of integrating retail and business banking and combining the bank’s African operations with those of Barclays, which controls Absa.
“There has been a massive shift with boards looking at longer-term, more sustainable returns,” Mindcor Group managing director John Brodie said. “Financial services firms have gotten into trouble in the past when they have rewarded short-term growth.”
Ramos was paid R20.7m for 2011, including deferred awards of R14 million. Standard Bank chief executive Jacko Maree received total pay of R27.2m, while FirstRand chief executive Sizwe Nxasana was paid R22.5m.
Ramos, who joined Absa in 2009, last got a cash bonus in 2010 when she was paid R2.28m as part of her R19.6m compensation. She would not be taking any annual performance incentive either in cash or a deferred award this year as a consequence of the 2012 financial results, the spokesman said.
Investors wanted to see pay match performance, Cadiz Asset Management equity analyst Adrian Cloete said. “That’s a core principle.”
Absa closed 0.06 percent higher at R162.15 on Friday, giving it a gain of 8 percent over the past 12 months.
Standard Bank has risen 8.2 percent over that period, while FirstRand rose 34 percent in the past year, making it the best performer among the big four local banks. – Bloomberg