Thursday, August 05, 2021 / 05:00 AM / By Proshare Research / Header Image Credit: EcoGraphics
Many times, CEOs get to receive large bonuses, benefits, and a sizeable chunk of dividend pay-out all of which substantially increase their total remuneration. Therefore, to get a good sense of CEO remuneration dynamics it is necessary to look at not just the basic pay packets of CEOs but their overall earnings.
After accounting for bonuses, benefits and dividends received the list of top ten remunerated CEOs for the year 2020 is altered considerably. Austin Avuru of Seplat Energy (whose bonuses, benefits, and dividend income amount to N2.66b) moves to first position. Also, Folasope Aiyesimoju of UACN (who earned an additional N335.32m as dividend income) moved seven points up the ladder to make a first-time entry into the list of the highest-paid executives.
Claiming the sixth position was Segun Agbaje of GT Bank, who had occupied the third position when our analysis was limited to basic salary. Equally worthy of note is the fact Herbert Wigwe of Access Bank leaped by eight spots to the third position after earning a dividend income of N1.21b in 2020. The top ten CEOs earned an average of N881.79m.
The top five on the revised list of the highest remunerated CEOs are those of Seplat Energy, Airtel Africa, Access Bank, MTN Nigeria, and UACN. The five CEOs who earned below the group's average income were the CEOs of GT Bank, Dangote Cement, Nigerian Breweries, Zenith Bank, while Seplat Energy's CEO for the second half of the year 2020 - Roger Brown- completes the list.
Remarkably, except for Segun Agbaje and Roger Brown, all other CEOs received larger remuneration packages than the average CEO remuneration paid by their respective companies in three years (see illustration 10 below).
Illustration 10: Highest-Paid Directors (Total Compensation) in 2020
Avuru earned a salary of N242m, which is a half of N484m the company spend on CEO remuneration, as Avuru was the CEO for six months in 2020 and retired in at the end of July 2020. He earned a dividend income 0f N2.47bn while his bonuses amounted to N195m making a total of N2.90bn in the year 2020. After accounting for additional income, Avuru climbed one point up the ladder to become the highest-paid CEO in Nigeria.
Meanwhile, total annual remuneration at Seplat Energy remained the same N490.8m between 2017 and 2018 but rose by +57.12% in 2019 to reach N770m in 2019. His total compensation rose over +200% to N2.90b in 2020. This substantial rise in 2020 was accounted for by the rise in the dividend pay-out by Seplat Energy compared to other periods (see chart 11 below).
Chart 11: Seplat Energy CEO's Total Compensation 2017 - 2020 (N'm)
Source: Seplat Energy Financial Statement, Proshare Research
Having earned a basic salary of N347.19m, the inclusion of bonuses amounting to N1.04bn meant that Mandava earned a total of N1.38bn in 2020 thereby climbing four steps up the ladder to become the second-highest-paid CEO in Nigeria. Meanwhile, CEO annual remuneration rose at Airtel Africa by +68.82% from N867.8m in 2018 to N1.47bn in 2019, however, in 2020 it reduced by -5.58% reaching N1.38bn (see Chart 12 below).
Raghunath's earnings were reported in US dollars, the average NAFEX for the different periods was used for the conversion to Naira terms.
Chart 12: Airtel Africa CEO's Total Compensation 2018 - 2020 (N'm)
Source: Airtel Africa's Financial Statement, Proshare Research
Wigwe earned N120m as basic salary in addition to a dividend income amounting to N1.21bn. Wigwe's earnings came to a total of N1.33bn in 2020, the Access Bank boss thereby climbed eight points up to become the third-highest-paid CEO in Nigeria. Total annual CEO remuneration at Access Bank increased by +30.54% from N1.02bn in 2019 to N1.33bn in 2020 following a similar rise in remuneration of +26.83% between 2018 and 2019 (see Chart 13 below).
Chart 13: Access Bank CEO's Total Compensation 2017 - 2020 (N'm)
Source: Access Banks Financial Statement, Proshare Research
Apart from earning a basic salary of N567m, Moolman earned no additional bonuses making his total remuneration stand at N567m for the year 2020. This makes Moolman drop three points down the ladder to become the fourth highest-paid CEO in Nigeria. Meanwhile, total CEO remuneration has been steady at MTN Nigeria in the last three years. In 2019, total CEO remuneration rose by only +2.62% to N585.94m from N571m in 2018, before subsequently falling by -3.23% to N567m in 2020 (see Chart 14 below).
Chart 14: MTN Nigeria CEO's Total Compensation 2017 - 2020 (N'm)
Source: MTN Nigeria Financial Statement, Proshare Research
Aiyesimoju earned a basic salary of N216m, which when added to his dividend income of N335.32m, brings his total earnings for the year to N551.37m. He climbs eight points up the ladder to become the fifth highest-paid CEO in Nigeria. Meanwhile, analysis of total annual CEO remuneration at UACN in the last four years reveals that while the total CEO pay packet rose by +432.61% from N51.3m in 2017 to N273.23m in 2018, it largely steadies between 2018 and 2019 but then saw another tremendous rise of +86.02% from N296.4m in 2019 to N551.37 in 2020 (see Chart 15 below).
Chart 15: UACN CEO's Total Compensation 2017 - 2020 (N'm)
Source: UACN's Financial Statement, Proshare Research
After considering additional income, Agbaje drops two points down the ladder to become the sixth highest-paid CEO in Nigeria. A closer look at the GT Bank CEO's total earnings shows that he earned a basic salary of N399.96m and an additional N124.88m as dividend income which brings his total earnings to N524.58m in 2020. Meanwhile, total annual remuneration rose marginally at GT Bank by +1.61% from N516.26m in 2019 to N524.58m in 2020 (see Chart 16 below).
Chart 16: GT Bank CEO's Total Compensation 2017 - 2020 (N'm)
Source: GT Bank's Financial Statement, Proshare Research
Puchercos earned a basic salary of N448m in 2020, but since he received no dividend income his overall earnings remained at N448m, he consequently drops four points down the ladder to become the seventh highest-paid CEO in Nigeria. Meanwhile, a further breakdown of total annual CEO remuneration at Dangote cement shows that in the last four years total CEO pay has been choppy with a rise of +10.03% from N407.18m in 2017 to N448m in 2020. While the period between 2019 and 2020 saw a massive rise of +31101% from N109.m in 2019 to N448m in 2020 (see Chart 17 below).
Chart 17: Dangote Cement CEO's Total Compensation 2017 - 2020 (N'm)
Source: Dangote Cement's Financial Statement, Proshare Research
Jordi Borrut Bel
While Borrut Bel earned a basic salary of N379m, the Nigerian Breweries CEO earned no dividend income making his total remuneration remain N379m for the year 2020. This makes Borrut Bel drop by three points down to the eighth position on the list of the highest-paid CEOs in Nigeria. Meanwhile, total CEO remuneration at Nigerian Breweries has been on a steady rise in the last three years, with a +41.99% rise from N190.5m in 2018 to N270.5m in 2019 before rising again by +40.26% to reach N379.39m (see Chart 18 below).
Chart 18: Nigerian Breweries CEO's Total Compensation 2017 - 2020 (N'm)
Source: Nig Breweries Financial Statement, Proshare Research
Onyeagwu earned a basic pay of N230m and ranked as tenth when basic salary only was considered, he moves one step up after considering other income. After the addition of his N139.5m dividend income the Zenith Bank boss' total earning amounts to N369.5m.
Total annual CEO remuneration at Zenith Bank has rapidly increased over the last four years. It increased by +103.04% from N105.89m in 2017 to N215m in 2018 while in the period between 2019 and 2020, total compensation saw a rise of +54.76% from N238.75m in 2019 to N369.5m in 2020 (see Chart 19 below).
Chart 19: Zenith Bank CEO's Total Compensation 2017 - 2020 (N'm)
Source: Zenith Bankâ€™s Financial Statement, Proshare Research
Roger Brown assumed the CEO position at Seplat Energy in June 2020 and so earned a prorated basic salary of N242m, when added to his dividend income for the year which amounted to N116.51m. This brings his earnings as Seplat Energy CEO to N358.51m in the year 2020. Roger Brown thereby makes a first-time entry into the list of the highest remunerated CEOs for the year claiming the tenth position (see Chart 20 below).
Chart 20: Seplat Energy CEO's Total Compensation 2017 - 2020 (N'm)
Source: Seplat Energy Financial Statement, Proshare Research
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