British American Tobacco (BAT) Kenya has made public the amounts it paid its directors including the performance parameters used to determine the pay, making it the first NSE-listed company to do this.
The Kenya Commercial Bank (KCB) and Equity Bank have also reported their directors’ pay but did not report the measures used to determine that pay.
BAT paid its new chief executive officer Beverly Spencer-Obatoyinbo a total of Sh37.6 million in the eight months ended 31 December 2017. The company said its executives get bonuses and shares in the parent company after achieving certain targets.
Other listed companies have not been as open to letting the shareholders know the outcomes expected from their executives. Additionally, the law does not require publicly listed companies to reveal the method used to determine executives’ pay, the assessment of the previous years’ performance, and the performance benchmarks, leaving the minority shareholders in the dark.
In the US, companies are required to disclose the reasons why executives are entitled to higher salaries and more shares.
In Kenya, listed firms have attempted to convince shareholders that they ensure that their executives’ pay is competitive based on market surveys of what the competition is paying. However, BAT has changed this trend and revealed that executives are paid a bonus when the firm’s market share increases by 20 percent and operating profits grow by 40 percent.