Kakuzi Limited has failed to reveal how much it pays its executive directors on the grounds that they are paid by Camelia PLC, the majority shareholder.
The NSE-listed firm says the managing director Christopher Flowers and finance director Ketan Shah do not get any direct benefits from the company.
However, Kakuzi has revealed its total key management compensation as Sh48.4 million in the year ended December 2017. Still, the company did not immediately disclose if this “amount was charged by companies in custody of the executives’ payroll.”
The Companies Act requires listed firms to reveal remuneration of every director including allowances, bonus, and salary.
“The managing director and the finance director are the only executive directors of the company. They have service contracts with fellow subsidiary companies within the parent company, Camellia Plc Group on rolling service contract basis, which are terminable at any time by a three months period of notice,” Kakuzi stated in its annual report.
“Their remuneration is dealt with within the service contracts of those fellow subsidiary companies.”
Kakuzi did not say which of its affiliates are directly paying its executives. Camellia’s subsidiaries in Kenya are Lintak Investments and Eastern Produce Kenya.
NSE-listed firms have shown different levels of transparency regarding how much they pay their directors with BAT being the most transparent indicating the need for stricter regulations. However, the Capital Markets Authority (CMA) has said its role does not involve policing compliance in accordance with the Companies Act adding that it has created the format of revealing directors’ pay.
“Please also note that the Authority is not the regulator for purposes of ensuring compliance with the Companies Act,” the CMA said in a statement.
Directors are liable to a fine of up to Sh1 million if they know of a company that has published a remuneration report that is not in accordance with the Companies Act.
The requirement to disclose directors’ remuneration aims at increasing accountability and enabling shareholders to measure the pay given against performance.