Registered users can save articles to their personal articles list. Login here or sign up here

Standard Bank CEOs bagged R89m in 2016

Remuneration of top five execs surpasses R200 million.

Standard Bank’s group chief executives, Ben Kruger and Sim Tshabalala, received total remuneration of nearly R45 million each in 2016, an increase of 3% on the year prior. Combined compensation jumped by 43% in 2015, with Kruger’s total increasing by 61% and Tshabalala’s by 28% to (near) parity. At that time, the bank said remuneration had been “normalised”.

The new chairman of the bank’s Remuneration Committee (Remco), Peter Sullivan, writes in the Integrated Report published on Friday that “the chief executives (CEs) met or exceeded most expectations in the areas where they have direct responsibility and accountability”. However, he points out that Liberty’s 61% drop in earnings had a “significant” impact on the group’s results. The Remco “debated the remuneration of the CEs at length,” it is noted, and it took the Liberty impact into account.

“Consequently, the committee agreed on a 4% increase in total short-term incentive, in line with the growth in headline earnings.” Actual cash earned in the year (including benefits and allowances) totaled just over R19 million each. 

 

Ben Kruger

Sim Tshabalala

 

2015

2016

%

2015

2016

%

Cash package

R7.538m

R7.809m

3.6%

R7.583m

R7,850m

3.5%

Benefits, allowances

R1.247m

R1.296m

3.9%

R1.406m

R1.348m

-4.1%

Short-term incentive (cash)

R10.15m

R10.09m

-0.6%

R10.15m

R10.09m

-0.6%

Short-term incentive (deferred)

R11.85m

R12.79m

8%

R11.85m

R12.79m

8%

Performance Reward Plan (PRP) award

R12.5m

R12.5m

R12.5m

R12.5m

Total

R43.285m

R44.485m

2.8%

R43.489m

R44.578m

2.5%

It does add elsewhere in the remuneration report that “Ben and Sim became increasingly engaged with Liberty’s board and management to ensure a speedy return to improved financial performance and strategic positioning”.

It is clear that the group’s unique situation of having joint chief executives effectively doubles the remuneration of this role.

Source: Standard Bank Annual Report

David Munro, chief executive, Corporate and Investment Banking, earned more than Kruger and Tshabalala, thanks to what Sullivan describes as a “very strong set of results”. His total remuneration grew by 6.9%, with “a 9.6% increase in short-term incentive” payment.

Munro’s counterpart in Personal and Business Banking (PBB), Peter Schlebusch, saw his total remuneration increase by 6.1%. Alongside executive responsibility for PBB, Schlebusch is also the head of the bank’s digitisation effort and is measured on this basis as well.

The bank says the “Japan fraud incident”, which it describes as a “uniquely sophisticated fraud”, was “taken into account in Peter’s remuneration determination and the PBB incentive pool determination”, even though “revenues were generated to cover losses incurred”. The losses from this card fraud incident are quantified as R300 million.

Sullivan says the Remco judged Schlebusch’s performances on both PBB and digitisation to be “excellent”.

The Remco considered newly-appointed group financial director Arno Daehnke’s “achievements and the complexity of his role in comparison to the market in arriving at his total remuneration”.

2016 remuneration

David Munro

Peter Schlebusch

Arno Daehnke (from 01/05)

Simon Ridley (retired 30/04)

Fixed

R6.792m

R6.852m

R5m

R2.2m

Annual cash award

R12.9m

R11.150m

R7.4m

R5m

Annual deferred award

R15.6m

R13.850m

R8.1m

PRP award

R10m

R10m

R7m

Total

R45.292m

R41.852m

R27.5m

R7.2m

In total, remuneration for executive directors and prescribed officers was R209.3 million in 2016, with R37.5 million of this being the fixed portion of that (i.e. cash package, retirement contributions paid, and other allowances). The cash portion of the annual (short-term) incentive award was R56.63 million. The remainder, some R115.17 million, comprises share awards as part of the short-term (annual) incentive as well as the long-term performance reward plan (PRP). The latter is measured at face value as at the date of award (with units allocated in 2017 using the group’s closing share price on March 1 (R146.38)).

Read: IBM says CEO pay is $33m. Others say it is far higher.

The first awards under the PRP, made in March 2014, vested in March this year (described as a “focus area” in the group’s report. After subtracting employees’ tax, the following amounts of Standard Bank shares were ‘delivered’ to executives on March 31, 2017:

  • Ben Kruger: 37 040 shares (share price: R153.70)
    Value of transaction: R5.693 million
  • Sim Tshabalala: 37 040 shares (share price: R153.70)
    Value of transaction: R5.693 million
  • Arno Daehnke: 17 787 shares (share price: R153.70)
    Value of transaction: R2.734 million
  • Associate of Arno Daehnke (S Brugman): 17 787 shares (share price: R153.70)
    Value of transaction: R2.734 million

Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.

Oops! We could not locate your form.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

AUTHOR PROFILE

COMMENTS   16

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

If executives deserve large salaries because that is what the free market requires well and good. However, when there has been fiddling (dishonesty) in companies (not only banks) and companies are fined, it seems that it is the investors (many of whom sre pensioners) who had nothing to do with the dishonesty who pay much of the fine.

We need smaller fines but aimed at the perpetrators. Otherwise it is the free market system with its many advantages to everyone, including the poor, that is in danger. Wrong behaviour has consequences for the whole of society.

I would have thought that non executive directors are the representatives of shareholder , however this doesn’t seem to be the case. Why large companies even entertain remuneration committees is beyond me as all they seem to do is hand our largesse to fellow directors and executives of the company for meeting targets which are never disclosed or are couched in such vague wording that they are achieved every time. The travesty is that seldom are these same people castigated or punished in the event of poor results. The executive and non executive positions in large companies seem to forget that shareholders are the primary funders of their very existence and need to rethink their approach to remuneration as the numbers are getting quite stupid

They use the same criteria as Eskom. How can Peter Schlebusch lose R300 Mil on his watch h and then still get a bonus for it?

Maybe this is why the ANC always refers to WHITE MONOPOLY CAPITAL!!! Seems as if all the people referred to in this article are WHITE MALES??????

Sim Tshabalala and Thabo Dloti white? Now i have heard everything.

Do these guys on their own really add that much value to the company?? Insane figures!

I’m all for the free market, but R45m in a year? Yes, I know some of it are deferred incentives and may be subject to performance measures, but the numbers are really getting out of hand. How many years does the average SB employee have to work to equal this – a hundred?

It’s all those unpaid overtime hours that are paying for this!!!!

David Munro is a friend of mine, from King Edward High School (KES) in 1988. I am pleased to see an ex-KES boy doing so well. Well Deserved. Bye from Abu Dhabi, CHARLES ARNESTAD CA(SA), CFA.

Regardless of this or that it’s sickening to say the lease.

When MTN reported how much it had paid Mr. Nhleko, there were these outcries, about ‘looting’ and ‘corruption’. I am quite fascinated that none of these claims seem to be made with respect to these equally high pay rates? Is there perhaps something different about these companies, that does not happen to the other company MTN and its CEO? I will take my answer offline.

Greed is a human condition . . .and many working in the financial sector show consistently they are no different from everyone else. But just maybe there are some exceptions. Can anyone think of a few prominent names of real business leaders who show that they are not smitten by this cancer of greed?

They call this “compensation” for a reason.

The money establishes the hierarchy at the club. It’s the grown up version of boys with rulers.

At this level it doesn’t even slightly incentivise good work, it just incentivises doing whatever it takes to keep the number larger than the next guy’s.

Load All 16 Comments
End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

GO TO SHOP CART

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2