Wednesday, August 04, 2021 / 05:50 AM / By Proshare Research / Header Image Credit: EcoGraphics
The size of CEO pay packs often generates concerns among different stakeholders, of course for a variety of reasons deriving from their equally diverse interests. While members of staff would be interested in assessing how much of the organization's revenue that is shelled out by the corporation to remunerate directors, vis a vis what they- the active factor of production- have received as a reward. Trade creditors and lenders, on the other hand, want to be sure that the firm is liquid enough to meet its obligation. Meanwhile, shareholders seek to compare CEO pay with how much returns they get on their equity investments. The fact that shareholders have had to endure a depletion in the worth of their investment due to a devastating public health crisis, would naturally make shareholders keener about ensuring that the organization's thinning earnings do not get frittered away while supporting the expensive lifestyle of a few directors. We would now look at the pay packets of the top 10 remunerated CEOs in Nigeria during the 2020 financial year.
Top Ten Basic Salary
In the 2020 financial year, a review of the remuneration received by the ten highest-paid CEOs shows that the average salary earned by all the top 10 CEOs is N376.19m, with the top five CEOs being those of MTN Nigeria, Seplat Energy, Dangote Cement, GT Bank, Nigerian Breweries. While the five CEOs who earned below the group's median pay include the CEOs of Airtel Africa, Julius Berger, Guinness Nig Plc, Unilever Nig Plc, and Zenith Bank.
Interestingly, except for the CEO of Unilever Nig Plc all the top 10 rewarded CEOs pocketed more, in terms of basic pay, than the average CEO salaries paid by their respective companies in the preceding years. A closer look at the basic salary paid to the top 10 most highly remunerated CEOs in the year 2020, shows that the top three- Ferdinand Moolman of MTN Nigeria (who earned N567m), Austin Avuru and Roger Brown of Seplat Energy(who earned N484m) and Michael Puchercos of Dangote Cement (whose basic salary for the year was N448m) earned a combined salary of N1.49bn, an amount which exceeds the combined salary of the second half of CEOs on the list by up to N106m. The bottom five CEOs which include those of Airtel Africa, Julius Berger, Guinness Nig plc, Unilever Nig Plc, and Zenith Bank all together earned a total of N1393m in the year under review (see illustration 9 below).
Illustration 9: Highest-Paid Directors in Terms of Basic Pay in 2020
MTN Nigeria/Ferdinand Moolman
Ferdinand Moolman assumed the position of CEO at MTN Nigeria in 2015 having earlier served as chief financial officer. The MTN CEO in the year 2020 earned N567m which represents a -3.23% decrease in his annual basic salary having earned N585.94m the previous year. In the three years to 2019, Moolman received an average CEO basic pay of N486.31m with the highest being in 2019 at N585.94m and the lowest in 2017 earning N302m (see chart 1 below).
In March 2021, Moolman was appointed Group Chief Risk Officer and since ceased to be MTN Nigeria CEO while Karl Toriola has now assumed the CEO position at the company.
Chart 1: MTN Nigeria CEO's Base Salary 2016 - 2020 (N'm)
Source: MTN Nigeria Audited Accounts, Proshare Research
Seplat Energy /Austin Avuru*/Roger Brown*
Austin Avuru and Roger Brown at the end of the 2020 financial year together earned a basic pay of N484m and so jointly rank as the second highest-paid CEOs in Nigeria. Austin Avuru who had been at the helm of affairs at Seplat Energy plc since May 2010 was replaced by Roger Brown in June 2020.
Seplat Energy which was the third highest CEO remunerating company in Nigeria in 2019, rose one spot in 2020. In the three years before 2020, average basic salary at Seplat Energy was N466m, although there had been a decrease of -8.90% in 2019 at which time CEO basic pay packet reduced from N483m to N440m before later increasing by +10.00% in 2020 to reach N484m (see chart 2 below).
Chart 2: Seplat Energy CEO's Basic Salary 2016 - 2017 (N'm)
Source: Seplat Energy Financial Statement, Proshare Research
Dangote Cement/Michael Puchercos
Michael Puchercos assumed the position of CEO at Dangote Cement plc, following the resignation of the erstwhile MD/CEO Joseph Makoju at the start of the 2020 financial year. In this period, he earned a total of N448m as basic pay. Notably, Puchercos had in his previous role as President & Chief Executive Officer of Lafarge Africa last earned N282.38m, an amount which is +58.65% of his current pay. Meanwhile, in the four preceding periods, Dangote cement paid an average basic salary of N312.25m with the highest being N429m in 2018 and the lowest being N109m in 2019. This means that there was a +311.01% spike in CEO pay at Dangote Cement between 2019 and 2020, although the 2019 pay itself represented a -74.59% slump in CEO pay when compared to 2018 (see chart 3 below).
Chart 3: Dangote Cement CEO's Basic Pay 2016 - 2020 (N'm)
Source: Dangote Cement Audited Accounts, Proshare Research
GT Bank/Segun Agbaje
Segun Agbaje who has been at the helm of affairs at GT Bank for a decade ranks as the fourth highest-paid CEO of listed companies in Nigeria in terms of basic salary. Interestingly, Agbaje had in 2019 also ranked fourth highest-paid CEO in the country, prior to which, he was the highest-paid Chief executive in the banking sector in 2018. In 2020, the GT Bank CEO earned N399.7m as basic salary, the same as in the preceding year. Between 2016 and 2019, Segun Agbaje earned an average of N303m, and although his pay had seen a +41.65% increase from N224.16m 1n 2017 to N384.16m in 2018. In 2019, his basic salary only increased by +4.05% from N384.16m to N399.7m (see chart 4 below).
Segun would be resuming as the Group Chief Executive Officer at Guarantee Trust Holding Company and has been replaced as CEO of GT Bank by Miriam Olusanya.
Chart 4: GT Bank Plc CEO's Basis Salary 2016 - 2020 (N'm)
Source: GT Bank Financial Statement, Proshare Research
Nigerian Breweries/Jordi Borrut Bel
Jordi Borrut Bel became Managing Director and CEO of Nigerian Breweries in January 2018. In 2019, he earned a basic pay of N379.39m making him the fifth most highly remunerated CEO when considering basic pay alone in the period. In the three years within which Jordi Borrut Bel served as CEO at Nigerian Breweries, he received an average salary of N295.15m. CEO Salary had dropped considerably by -44.01% in 2018 from N340.2m in 2017 to N190.47m. In 2020, his base salary rose Y-o-Y by +40.23% to N379.39m (see chart 5 below)
By July 2021, Jordi Borrut Bel would be stepping away from the CEO position at Nigerian Breweries Plc.
Chart 5: Nigerian Breweries CEO's Basic Salary 2016 - 2020 (N'm)
Source: Nigerian Breweries Financial Statement, Proshare Research
Airtel Africa/ Raghunath Mandava
Ragunath Mandava of Airtel Africa earned a basic salary of N347.19m, the sixth highest-earning CEO of any locally listed company. In the last three years, Airtel Africa has paid out an average of N306.75m as CEO salary. CEO basic pay increased by +7.16% from N276.64m in 2018 to N296.42 in 2019 before jumping by +17.13% to reach N347.19m in 2020 (see chart 6 below). Mandava would be effective from October 1, 2021, cease to be the CEO at Airtel Africa, he would be replaced by Olusegun Ogunsanya.
Chart 6: Airtel Africa CEO's Basic Salary 2018 - 2020 (N'm)
Source: Airtel Africa Audited Report, Proshare Research
Julius Berger Nigeria/Lars Richter
Lars Richter who has served as the CEO of Julius Berger Nigeria since October 2018, earned a basic pay of N316.64m to rank as the seventh highest-paid CEO of the listed companies in Nigeria in 2020. Richter had ranked as the eighth highest-paid CEO in Nigeria in 2019, at which time he received an annual remuneration of N217.07m. Between 207 and 2020, Lars Richter earned an average of N284.23m, although his pay had seen a -31.95% decrease from N319m in 2018 to N217.07m in 2019 only to subsequently increase by +45.87% in 2020 (see chart 7 below).
Chart 7: Julius Berger Nigeria CEO's Basic Salary 2016 - 2020 (N'm)
Source: Julius Berger Nigeria Financial Statement, Proshare Research
Guinness Nigeria/Baker Magunda
Baker Magunda who has served as the CEO of Guinness Nigeria Plc since July 2018, ranks as the eight highest-paid CEO of listed companies in Nigeria when appraising basic pay only. In 2020, the Guinness Nigeria Plc CEO earned N255m as basic salary, which is +32.12% higher than that of the preceding year. Magunda was rated as the highest-paid Chief executive in the consumer goods sector in 2018 and the third highest in 2019. In the three years before 2020, Guinness Nigeria paid an average of N247.47m as CEO salaries. CEO salary had seen an astronomical rise of about +147.85% increase from N186m in 2017 to N461m in 2018 only to plummet in the following year by -58.13% to N193m in 2019 (see chart 8 below).
Chart 8: Guinness Nigeria CEO's Basic Salary 2016 - 2020 (N'm)
Source: Guinness Nigeria Financial Statement, Proshare Research
Unilever Nigeria/Carl Cruz
Carl Cruz who was appointed CEO of Unilever Nigeria Plc in February 2020, earned a basic pay of N245m in the year 2020, to rank as ninth on the list of the highest-paid CEOs in Nigeria. Cruzâ€™s predecessor at Unilever Nigeria- Yaw Nsarkoh -had ranked as the highest-paid Chief executive in the consumer goods sector in 2019. Between 2016 and 2020, Unilever paid an average of N259m as CEO salary, although CEO basic pay had risen by +50.00% from N220m in 2017 to N330m in 2018, it decreased by -8.33% in 2019 and subsequently by -19.01% in 2020 (see chart 9 below).
Chart 9: Unilever Nigeria CEO's Basic Salary 2016 - 2020 (N'm)
Source: Unilever Nigeria Financial Statement, Proshare Research
Zenith Bank/ Ebenezer Onyeagwu
Ebenezer Onyeagwu was appointed as the CEO of Zenith Bank Plc in June 2019, and in that year, he earned N125m. Following a massive +84.00% appreciation in his basic pay, Onyeagwu enters the list of the highest-paid CEOs in Nigeria as the tenth. CEO pay in Zenith Bank had been at an average of N106.5m in the four years preceding the year 2020. Before the +84.00% rise in 2020 when CEO salary rose from N125m to N230m, CEO pay packet had remained stable with pay seeing a +42.05% increase from N88m in 2017 to N125m in 2018 (see chart 10 below).
Chart 10: Zenith Bank CEO's Basic Salary 2016 - 2020 (N'm)
Source: Zenith Bank Financial Statement, Proshare Research
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