CIC Insurance has revealed in its recent yearly report that the Group’s chief executive Tom Gitogo earned 73.2 million in the year ended December 2017. The annual earnings increased by 7 percent from 68.4 million in the previous year.
The company said its salary levels are based on business performance and attracting and holding on to the best talent.
“To retain and motivate such individuals requires compensation that is not only commensurate with their skill and time devoted to the company but also competitive,” CIC said in the report.
“The group has developed and put in place a remuneration policy for both the executive and non-executive directors that is transparent and considers the business needs and the overall performance of the business.”
Gitogo received a salary of 4.3 million each month during the aforementioned period and also earned allowances worth Sh21 million.
In the previous year, his salary was Sh3.9 million each month with allowances totalling to Sh20.9 million. However, he did not receive a bonus in the two years after failing to achieve set targets.
“The remuneration for the executive director is as per a negotiated contract of employment. It incorporates a bonus scheme that is only triggered upon achieving various targets agreed with the board. The trigger was not reached in 2016 and 2017,” CIC said.
Gitogo’s contract is valid until April 2020 with “a gratuity of 31 percent of basic pay at the end of the contract for each year worked.
CIC’s combined ratio, “a measure of profitability in the mainstay insurance business” stood at 119.2 percent and 117.7 percent in 2016 and 2017 respectively.
“This means its expenses and claims are running ahead of net premiums, resulting in underwriting losses that it has had to offset from other business lines including investments.”
The company’s net earnings increased 2.5 times to Sh478.4 million in the year ended December when fees and commissions income rose by 57 percent to Sh1 billion.