Nedbank's chief executive Mike Brown with Pepper.
DURBAN - The Nedbank Group slashed the remuneration packages of its three executive directors in 2017 as lower headline earnings growth and under performance by its subsidiary Ecobank Transnational Incorporated hit its balance sheet.

Nedbank in its annual report yesterday said that chief executive Mike Brown’s total salary, including incentives for the year, declined 2.3percent to R38.12million, as compared to 2016’s total remuneration of R39.02m.

It said chief operating officer Mfundo Nkuhlu’s package declined 0.8percent to R25.75m, while chief financial officer Raisibe Morathi’s remuneration fell 0.6percent to R21.76m.

Managing executive for Nedbank Wealth Iolanda Ruggiero's remuneration declined by 3.2percent to R12.85m.

The bank reported that its headline earnings increased by 2.8percent in 2017, compared to 5.9percent growth in headline earnings achieved in 2016.

Ecobank profits of $288m (R3.4billion) before tax in 2017 rose from the $131m loss in 2016. Nedbank executive directors were paid a total of R85.62m for 2017, down from R86.85 paid in 2016.

Ron Klipin, a senior analyst at Cratos Wealth, said the packages were impacted by the bank’s failure to meet its internal targets. “Headline earnings only grew by 2.8percent in 2017 as compared to 5.9percent as compared to 2016. The other banks, like Standard Bank, which was the best performing bank, performed better than Nedbank. I think the management took a cautious stance in order to mitigate against risk resulting in the topline revenue being subdued,” Klipin said.

However, Nedbank Corporate and Investment Banking managing executive Brian Kennedy received a 4.4percent increase in total remuneration to R36.25m while managing executive for Retail and Business Banking Ciko Thomas saw his total remuneration rising 14.9percent to R17.99m.

Nedbank’s group remuneration committee (Remco) chairperson Mpho Makwana said the board, through group Remco, remained committed to ensuring that remuneration of executive management was fair and responsible in the context of overall employee remuneration.

“The Group Exco holds management accountable for ensuring total remuneration is distributed fairly,” Makwana said. The remuneration committee stressed that the focus for the year ahead would be to ensure that packages were implemented in accordance with the Remuneration Policy of the bank.

The non-executive directors of the bank were paid a total of R20.06m in 2017, up from R17.32m as compared to 2016.

The group said the non-executive director fee proposals for 2018 were evaluated by an independent board committee consisting of Mike Brown and Bruce Hemphill, with advice from independent experts.

“This evaluation was conducted from a number of perspectives, including peer group comparisons, effective rates per committee and year-on-year increases. Increases to the chairperson’s fee, board fees and several committee fees have been proposed at a range between 6percent and 18.4percent, to improve alignment with market-related non-executive fees, with the overall increase at 7.6percent,” the group said.

- BUSINESS REPORT