Kenya’s Pam­pered CEOS

Com­pany boards make big bets with ex­ec­u­tives, of­fer­ing them lux­u­ri­ous priv­i­leges to woo and re­tain them.

Business Daily (Kenya) - - LIFE - Brian Ngugi and Con­stant Munda cmunda@ke.na­tion­media.com bn­joroge@ke.na­tion­media.com

When Har­vard trained 50-year-old ex­ec­u­tive— who sought anonymity for pri­vacy pur­poses — landed the plum post of a chief ex­ec­u­tive of a Nairobi blue chip com­pany, fresh from his stint as a se­nior man­ager at an Amer­i­can based lender, he was of­fered a salary of Sh5 mil­lion.

But that was not all; the mar­ried ex­ec­u­tive with a young fam­ily of two was also of­fered round-the-clock se­cu­rity, ac­cess to a pri­vate jet for of­fi­cial trips, a per­sonal chef, a per­sonal trainer and an ar­moured lux­ury limou­sine.

Wel­come to the en­vi­ous per­haps out­ra­geous world of ex­ec­u­tive priv­i­leges for a few elite Kenyan CEOS and se­nior ex­ec­u­tives.

For the av­er­age em­ployee the pur­suit of a “ben­e­fits pack­age” re­sem­bles im­ages of a huge cash com­pen­sa­tion which may in­clude salary, bonuses and stock op­tions. Not for this group of highly paid pam­pered CEOS. Blue chip com­pa­nies in Kenyan are pulling out all the stops to keep their top man­agers happy.

Com­pany boards are mak­ing big bets with cor­po­rate ex­ec­u­tives, of­fer­ing them lux­u­ri­ous priv­i­leges in their con­tracts to woo and re­tain them.

Th­ese in­clude lux­ury hol­i­days, wardrobe al­lowances, car and per­sonal driv­ers, body­guards, pri­vate club mem­ber­ship, hous­ing, en­ter­tain­ment al­lowance, elite school fees ben­e­fits.

Some of the other perks the CEOS en­joy in­clude fly­ing on pri­vate jets or first class, en­ter­tain­ment and hol­i­day al­lowances, coun­try club and gym mem­ber­ships, mort­gages and world­wide med­i­cal cov­ers which en­ables them to seek treat­ment abroad.

Other perks in­clude re­im­burse­ment for taxes paid.

“Sur­pris­ingly it is not only the multi­na­tion­als and big com­pa­nies do­ing it. We re­cruit for top medi­um­sized firms and in the last cou­ple of years they have started to of­fer perks to their se­nior ex­ec­u­tive staff with the main goal be­ing to re­tain them and spur pro­duc­tiv­ity,” says Per­mi­nus Wainaina, the man­ag­ing part­ner of Kenyan re­cruit­ment agency Cor­po­rate Staffing of the pam­pered CEOS.

The mod­ern-day CEO of a blue chip firm is a dif­fer­ent breed of a leader from what we have al­ways known.

The CEO’S ba­sic monthly pay ranges from $8,000 (Sh825,840) to $20,000 (Sh2.06 mil­lion) based on qual­ity, skills and ex­per­tise, with adds-on in bonuses and mileage.

But to them, how­ever, it is not al­ways about the salary.

“If an ex­ec­u­tive is to fo­cus all their en­er­gies on a com­pany then they need some things taken care of as a min­i­mum,” adds Mr Wainaina.

“This in­cludes profit share/ bonuses, club mem­ber­ship, hous­ing (and specif­i­cally the neigh­bour­hood , en­ter­tain­ment al­lowance, school fees, and an en­hanced med­i­cal cover. Some also re­quest for a risk and travel al­lowance.”

He ex­plains that for most chief ex­ec­u­tives, top of mind is the usual ben­e­fits that in­clude med­i­cal, car, en­ter­tain­ment, ed­u­ca­tion, hous­ing and bonuses.

“We also have clients who spon­sor their ex­ec­u­tive staff with a self-de­vel­op­ment course or pro­gramme of their choice once a year out­side the coun­try. An­other is where ex­ec­u­tive staff be­come share­hold­ers after serv­ing for a given du­ra­tion,” he says.

This is not all as au­ton­omy and

flex­i­bil­ity in mak­ing de­ci­sions, right team on board and se­nior man­age­ment, and in­no­va­tion are some of the key fac­tors that are in­creas­ingly shap­ing de­ci­sion to oc­cupy the C-suite of a large firm, ex­ec­u­tive re­cruiters say.

Sep­a­rate perks

Farah Sa­manani, the man­ag­ing part­ner of Boy­den East Africa, a sub­sidiary of the New York-head­quar­tered global ex­ec­u­tive re­cruit­ment gi­ant, says while CEOS still en­joy some of th­ese priv­i­leges, most of them do not want them as sep­a­rate perks in their con­tracts. Hav­ing them as a sep­a­rate perks may mean for­feit some of them as they are re­newed an­nu­ally.

“What I no­tice that they have some higher pref­er­ence to have some abil­ity to be flex­i­ble around the pay pack­age and so they might want to have more base pay and then de­cide how they want to al­lo­cate that as op­posed to hav­ing a lot of perks as may have been the case in the case where you had air fares, club mem­ber­ship and all those things,” Ms Sa­manani said in an in­ter­view. The abil­ity to choose how they want to spend from the (CEO) pack­age usu­ally drives at de­sire to have au­ton­omy in mak­ing de­ci­sions, although they usu­ally pre­fer to be con­sul­ta­tive with their boards and man­age­ment team.”

Boy­den East Africa has clients in de­mand­ing sec­tors such as bank­ing, in­sur­ance and telecom­mu­ni­ca­tions.

The CEOS are also keen on some au­ton­omy in mak­ing cor­po­rate de­ci­sions through a con­sul­ta­tive process at board and se­nior man­age­rial level. This way, a ma­jor­ity feel they are able to im­pact change in that will yield de­sired re­turns for share­hold­ers as well as grow­ing their wealth.

“This is a mar­ket where there’s po­ten­tial to do so much be­cause it is not yet de­vel­oped, and so you find that the CEOS want to get out there, leave a mark and say ‘this is what I have done, this is how I have changed things, this is how I have rethought this busi­ness or sec­tor’,” Ms Sa­manani said. And to achieve the de­sired out­come, the C-suite ex­ec­u­tives have keen in­ter­est on the team they work with in re­al­is­ing the cor­po­rate vi­sion.

They are par­tic­u­larly keen on the com­po­si­tion of the board who are de­ci­sion mak­ers on the cor­po­rate pol­icy and strat­egy, in­vestors who look for funds and se­nior man­ager who run the busi­ness.

Clear ca­reer path

Ex­ec­u­tive re­cruiters say the CEOS want to be sur­rounded with “right team” that shares in the vi­sion for the com­pany as this de­ter­mines whether or not they will be suc­cess­ful in their ca­reer.

Most of them do not usu­ally in­flu­ence who sits on the board, but look at its com­po­si­tion be­fore de­cid­ing to oc­cupy the C-suite.

“Re­cently we had a CEO who we were try­ing to con­vince to join a busi­ness that is not well known

here (East Africa), has a very in­no­va­tive model but not tested, and it is not clear it is go­ing to be suc­cess­ful,” Ms Sa­manani ex­plained.

“What con­vinced the per­son to join was a real high cal­i­bre, well ex­pe­ri­enced board. Once the per­son met all the board mem­bers, he felt this is ac­tu­ally some­where ‘I can grow and learn and be suc­cess­ful’ be­cause the board had a vi­sion and he shared that vi­sion.”

Ac­cord­ing to in­de­pen­dent an­a­lyst Aly Khan Satchu, the hunt for ta­lent has fu­elled the rush to pam­per se­nior ex­ec­u­tives.

Mr Satchu says com­pa­nies re­alise CEOS can be the dif­fer­ence be­tween suc­cess or fail­ure for com­pa­nies hence the craze for com­pa­nies to outdo each other in of­fer­ing priv­i­leges.

“A sin­gu­lar cor­po­rate leader can cre­ate out­stand­ing and ex­po­nen­tial value for a com­pany’s share­hold­ers. Just look at com­pa­nies like Ap­ple un­der Steve Jobs, Ali Baba un­der Jack Ma and

more,” he says.

“So there is no prob­lem pay­ing up for CEO ta­lent as long as the value is be­ing cre­ated. Mr Col­ly­more is a clas­sic ex­am­ple of a CEO de­liv­er­ing ex­po­nen­tial re­turns.”

Most of the CEOS are also keen to share in the for­tunes they help cre­ate by buy­ing into the com­pany.

Some of the top-notch CEOS in the coun­try are known to own some stakes in the com­pany they run. They in­clude James Mwangi who con­trol 5.52 per cent stake in Eq­uity Hold­ings, Ben­son Wairegi (4.64 per cent in Bri­tam), Gideon Muriuki (2.09 per cent in Co-op Bank as at 2013) and James Mwo­ria (0.61 per cent in Cen­tum). Sa­fari­com’s CEO Bob Col­ly­more also owns 1.52 mil­lion shares.

Be­sides Em­ployee Stock Own­er­ship Plan (ESOP), some CEOS also look for a clear ca­reer path op­por­tu­nity after serv­ing their term.

“When you are at the top of your game and your term ends, where do you go, what do you do next, is there a po­si­tion that is part of a group level or is there an in­ter­na­tional com­po­nent? That’s some­times quite hard for a CEO and they want to know what has been pro­vided,” Ms Sa­manani said.

| FWT] h^d PAT Pc CWT c^_ ^U h^da VP\T P]S h^da cta\ T]SB FWTAT S^ h^d V^.

FILE

PERKS Some of the perks CEOS en­joy in­clude ly­ing on pri­vate jets or irst class, en­ter­tain­ment and hol­i­day al­lowances.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.