FirstRand awards chief R38m after profit growsComment on this story
FirstRand’s Sizwe Nxasana was South Africa’s highest-paid bank chief executive after the nation’s second-largest financial services company more than doubled its full-year profit following the sale of assets.
For the 2011 financial year, Nxasana, 54, received a total of R38 million, which included a salary and bonus package of R15.1m, a deferred bonus of R4.5m and a gain from a share trust of R18.4m, according to the Johannesburg-based group’s annual report, published last week. Nxasana’s share-trust payment stemmed from his original appointment grant, said Sam Moss, the lender’s spokeswoman, adding Nxasana was awarded another 892 066 shares in 2010, a third of which would vest next year.
At yesterday’s price those shares are potentially worth another R17.3m to Nxasana, bringing the total value of his awards in fiscal 2011 to R55.3m.
Nxasana, the chief executive since January 2010, having joined the group in 2006, was awarded a package valued at R45m last year. His compensation topped that of Africa’s largest bank, Standard Bank, which increased the pay of chief executive Jacko Maree by 9.7 percent in 2010 to R6.53m. Nedbank raised chief executive Mike Brown’s total compensation 63 percent in 2010 to R12.46m and Absa more than doubled chief executive Maria Ramos’s pay and incentives to R27.5m after the lender’s profit rose 19 percent.
On September 13, FirstRand said it would pay a special dividend of 70c a share after net income rose to R20.1bn in the 12 months to June, from R9.44bn a year earlier. FirstRand’s first special dividend since its creation in 1998 came after the company sold its stake in insurer Outsurance Holdings for more than R4bn and spun off its Momentum Group insurance business.
“FirstRand was the best performing of the big four banks over the past year, hence you would expect the chief executive to be rewarded accordingly,” said Patrice Rassou, the head of equities at Sanlam Investment Management, which holds shares in the lender.
To evaluate executive pay, the bank’s compensation committee noted in the annual report that FirstRand achieved so-called normalised earnings from continuing operations of R10.1bn, an increase of 22 percent, and produced a normalised return on equity of 18.7 percent. Growth in profit after tax, risk appetite, efficiencies, customer service and the empowerment of black people were other criteria used to determine executive pay, the compensation committee wrote. – Bloomberg
Henk Kleynhans, wrote
Sizwe delivers a 22% increase R10,100M in profits and gets R38M. That's a mere 0.38% of the profits! And it's a 16% less than he was paid last year! As a FirstRand shareholder and a huge fan of FNB's innovation and onlinesocial (e.g. @Rbjacobs) presence, I'd advocate a significant increase to ensure Mr Nxasana keeps up the GREAT work and we don't risk losing him!
It is clear most of the comments shared about Sizwe's reward package are baseless. Let's remember he does not make decisions about his pay, the remuneration committee makes these decisions based on the contract they have with the CEO. The contract makes specific promises on what the CEO must deliver and what the appropriate reward woud be if he so delivers. This clearly says he DELIVERED some of us are very proud of him.
So how come staff don't get paid a bonus because they are told " you get paid a salary to do the job", but the CEO gets paid a huge bonus for doing a job that he gets paid a salary for, How can they justify this ! Duh !!!
Maybe I should be the next big bank exec, seems easy, pay less, sell assets and retrench AKA restructure and as a result get paid a fortune, while clients pay more each and every day to receive a lesser service, mmmm
This guy scr*wed up Telkom and now he's scr*wing Firstrand while employees there are rewarded with louzy PS3's
why complain about banks' executive pay? just put your money under your bed and call it a day.
and the pensioners-the people who built that bank up- will probably be lucky to get 5% pension increase.....
FNB has cut banking staff to the bone with those left to do the work running around like headless chickens and expected to do the work of 2-3 people. Any recognition for them? Never. Well done to FNB for rewarding those for putting thousands out of a job so that they could get FAT bonuses.
capitalism at its worst when will they start retrencing to cut costs?
aNON the Financial Wizard, wrote
no bank, finance or other exec is worth that kind of money. clearly the financial world lost the ability to determine fair remuneration, while the govt loots our taxes the financial institutions loot our private capital with massive charges and our retirement funds with gratuitous bonuses to themselves for merely matching the 'inflation rate'. they work in the most sumptuous conditions reeking with luxury while we slave our behinds off to keep them.....off with their heads!!!
Doubled profits on the sale of assets. This is exactly what Sizwe did to Telkom. Sale of assets and retrenchment of staff. Cut your operating costs, not improve performance. Look where Telkom is now. As I recall this guy left Telkom with about R1 Billion claim against it by a software provider they used. Left it to the next CEO.
So, you sell off the bank's assets, double the profits and get paid a whack. Sounds a bit like rape and pillage to me?
this is why we pay such high interest on loans and high bank fees,so that sizwe and co can party it up with exhorbitant unjustified salaries
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