CAPE TOWN - Standard Bank chief executive Sim Tshabalala’s total remuneration rose 9% to R48.50 million for the year to end December compared to the R44.58m he received in 2016.
The bank yesterday said in its annual report that the package included a guaranteed salary of R9.1m, an annual bonus of R11.4m, R14m in an annual deferred award, as well as an additional R14m as part of the group’s performance reward programme (PRP).
The group said Tshabalala led the group in a challenging environment and he showed quiet but very influential leadership.
“His focus on implementing the group strategy was unwavering and his commitment to delivering a set of results which were not only financially pleasing, but which encompassed significant improvements in client centricity, employee engagement and social, economic and environmental impact the group has in the communities in which we do business was impressive,” Standard Bank said.
According to the report the remuneration committee decided to increase the PRP award to R14 million to reflect Tshabalala's single CEO role.
Previously Tshabalala was joint CEO with Ben Kruger.
Peter Sullivan, chairperson of the remuneration committee, said the group’s remuneration philosophy sought to share its earnings fairly among shareholders, fiscal partners, executives and its employees who delivered value over time.
In the year to end December, the group reported a 14% increase in headline earnings to R26.3billion, while return on equity improved to 17.1% from 15.3% in 2016.
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2017
2016
% change
1. Fixed remuneration
R9,103 million
R9,198 million
(1)
2. Annual cash reward
R11,350 million
R10,090 million
12%
3. Annual deferred award
R14,050 million
R12,790 million
10%
4. PRP award
R14 million
R12,5 milion
12%
Total reward
R48,503 million
R44,578 million
9%
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Former joint-chief executive and now executive director Ben Kruger was paid R46.5m, which consists of a R9.08m salary.
“As joint chief executive for the past five years, Ben Kruger has worked closely and seamlessly with Tshabalala to develop the group strategy and produce the excellent set of all round results which the group has delivered this past year,” the group said.
Kruger stepped down from the position of joint CEO for the group in 2017 but according to the report continued to play an important role in the future success of the group.
The report’s remuneration overview said that in assessing the values delivered, the group’s performance is taken into consideration a through-the-cycle basis that takes into account both financial and non-financial metrics in terms of the philosophy.
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2017
2016
% change
1. Fixed remuneration
R9,079 million
R9,105 million
-
2. Annual cash reward
R11,252 million
R10,090 million
10%
3. Annual deferred award
R13,825 million
R12,790 million
8%
4. PRP award
R12,5 million
R12,5 milion
-
Total reward
R46,529 million
R44,485 million
5%
The CFO for the group, Arno Daehnke walked away with R32,447 million for 2017. He also completed his first full year as the CFO for the group. According to the report he was an important driver of cost management which had a positive impact on the group's 2017 results.
The three prescribed officers for the group received between R29,517 million and R43,950 million in remuneration.
One of the prescribed officers who resigned last year also received a remuneration of R40,994 million.
The remuneration committee believes in fair and responsible remuneration as stated in the report.
According to the report, fair and responsible remuneration means making sure that remuneration within the group is both externally competitive and internally equitable.
The committee ensures that the rewards process is independently governed to increase the sense of fairness.
They also acknowledge that fair and responsible remuneration is applicable in all the areas that the group operates in.
Sullivan said a shareholder roadshow was undertaken in May last year to seek feedback from its major shareholders on its remuneration policy. “We welcomed their comments and input. An approval rating for our remuneration policy of 95.9% was received at the group’s annual general meeting in May 2017.
“The group ensures that remuneration is responsible and fair, including that it is funded by, and linked to, the creation of value over the long term; the requirement that remuneration decisions are rational and objective, impartial, free from discrimination, free from self-interest, favouritism or prejudice on grounds, including race, gender and sexual orientation; and the requirement that stakeholder views are taken into account.”
Other banks’ chief executives were paid handsomely during the period.
Capitec Bank’s chief executive Gerrie Fourie was leader with a total remuneration R56.6m. Absa bank chief executive Maria Ramos received R37m, while Nedbank’s Mike Brown was paid R38m during the year.