Mixed reactions have continued to trail significant increase in Deposit Money Banks (DMBs) Managing Directors/Chief Executive’s earnings in 2015, prompting some of the shareholders to express divergent views on the latest hike in salaries of bank chiefs. Although, some of the investors that spoke with our correspondent in Lagos called for review of high payment to bank directors, which they said was not in sync with current economic realities, others believe what they were currently earning was not too much considering their contributions to the growth of their banks.
However, in spite the general recognition of the year 2015 as a difficult year for businesses to hit their targeted profit as claimed by most of the private business owners in the country, coupled with challenging operating environment which has continue to throw up profitability challenges to most of the DMB, indications have emerged that MD/CEO of Union Bank Plc, received the highest salary of N208 million in 2015, representing 36 percent or N55 million increase from N153 million earned in 2014.
This was followed by the Guarantee Trust Bank (GTBank) MD/CEO, who earned a whopping N204.9 million, up by 12 percent or N22 million from N183 million in 2014. The CEOs of UBA and Fidelity Bank came in as third and fourth highest earners respectively with N125 million and N102 million in 2015, up from N116 million and N94 million in 2014. Others are FirstBank-N90 million, Zenith Bank-N78 million, Wema Bank-N70 million, and Diamond Bank-N25 million.
Reacting on this development, Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, noted that it was necessary to pay banks chiefs and their executives well, in order to prevent them from stealing depositors money, and also in view of the amount of work they have to do to generate earnings for their banks. According to him, “if the bank executives are well paid, the temptation of stealing depositors’ money will not arise. However, considering the economic downturn, I think the banks can equally cut the package they take home to reflect the present economic realities. If State Governors and Ministers are cutting their salaries, I think the banks should equally follow suit.”
“There are some allowances for banks’ executives that need to be cut down or completely removed. It is time for companies to tighten their belts given the global oil fall which had affected the country’s income. So, if the economy picks up, banks can review the packages paid to their executive directors”, he pointed out. He added: “Under normal circumstances, bank executives should be well remunerated given the nature of the risk they undertake. If they are under paid, then you begin to see all kinds of stealing and rubbery in the banks through insider collaboration.”
Also, Chairman, Proactive Shareholders Association of Nigeria (PROSAN), Mr. Taiwo Oderinde, said the huge money paid to directors was unfair to shareholders. Taiwo explained that the banks’ executive compensations are really on the high side when you compare it to other countries, stressing that the executive directors of banks are given all kinds of allowances at the expense of depositors and shareholders. According to him, we do react on this issue when we attend Annual General Meetings (AGMs). In some cases, we refused to approve their remunerations and ask them to go back and review it.
“The problem we are having as shareholders is that in some cases we don’t have shareholders’ representation on the board. By the time they set up committee to review the remuneration you will only see executive directors taking decisions. The executive directors are really feeding on shareholder’ fund and this has to be checked by the regulators in the industry. The executive directors have access to our funds and make use of it the way they like. I think there should be regulation in this aspect of emolument to stop these mouth-watering packages.” On his part, Chairman, Renaissance Shareholders Association of Nigeria, Ambassador Olufemi Timothy, said, “The banks’ executive emolument is not too much considering the earnings they make for the bank.
These are people who toil all day and night to see that depositors’ money is kept safely. So the high risk element should also be another great reason why they should be paid well. Even the so called Foreign Exchange, (forex ) are kept by these banks.