Investec’s top execs did strike it rich
INVESTEC’s annual report on Friday showed that its top four executives were paid a combined £19 million (R322.83m) in salaries, bonuses and other benefits in the 2016 financial year, up from the £17.8m they pocketed from the previous year, thus dwarfing the pay of their industry peers.
Leading the way was the group’s head of the Asset Management (IAM) unit, Hendrik du Toit, whose total compensation comprised of a £4.6m bonus and £440 950 in gross remuneration.
The group’s chief executive Stephen Koseff ’s total remuneration came to £4.8m, which includes an gross remuneration of £1.4m, a bonus of £1.9m, long-term incentive awards of £1.4m, while the company’s managing director Bernard Kantor’s total pay also amounted to £4.8m, including a gross remuneration of £1.4m, a bonus of £1.9m and long-term incentive awards of £1.4m.
Glynn Burger, the group risk and finance director, took home £4.3m, including a gross remuneration of £1.3m, a bonus of £1.6m and long-term incentive awards of £1.3.
Du Toit’s IAM unit grew its asset under management to £95.3bn in the period from £75.7bn in the corresponding period, while it posted operating profit before non-controlling interest £164.8m, an increase of 22.3 percent and contributed 27.5 percent to group profit.
Perry Crosthwaite, the chairperson of the remuneration committee at Investec, in the annual report, said that the committee had approved bonuses to executives In light of the positive financial performance of the group during the 2017 financial year and the resultant progress achieved across a range of financial and non-financial and strategic measures.
“Hendrik du Toit was awarded a bonus of £4.65m, determined solely in relation to the performance of Investec Asset Management 20 percent of the bonus awarded to Du Toit was deferred into the IAM Deferred Bonus Plan,” Crosthwaite said.
Executive pay has been a bone of contention in South Africa as wage gap and equality remain stubbornly high.
Earlier in the year, Business Report reported that Standard Bank last year paid its top six executives a combined R209m in salaries, bonuses and other benefits, with group head of corporate and investment banking David Munro netting more than the companies’ joint chief executives in the 2016 financial year.
Munro, who has since left to take on the chief executive position at Liberty took home R45.2m in total earnings for the year. His earnings included a basic salary of R6.7m, annual cash reward of R12.9m, annual deferred award of R15.6m and R10m in performance reward plan.
The bank’s joint chief executives Sim Tshabalala and Ben Kruger earned R44.4m each. Nedbank’s top 7 executives pocket R150m in salaries, bonuses and other benefits last year, with the companies chief executive Mike Brown accounting for R36.7m of this.
Absa’s top 7 executives were awarded R114.4m in salaries and other benefits in the 2016 financial year, with chief executive Maria Ramos total take home pay cheque amounting to R29.5m.
The King IV Report on Corporate Governance recommended the tightening of requirements on remuneration for companies.
Last week, professional services firm Deloitte, released its Executive Compensation Report 2017 that covered companies in the JSE top 100, as at September 2016.
Among other things, the report found that the executive compensation industry has much to do in providing informed advice and commentary to all stakeholders, such that the executive pay controversy is translated into an informed debate towards a balanced and generally supported solution.
“Chief executive total annual compensation grew from an aggregate base of R973m to R1.6bn, an increase in the index to 167 percent. During the same period, the index of Shareholder Value grew to 176 percent, while that of the JSE all share index grew to 155 percent. In contrast, total remuneration grew to only 119 percent.”
“By comparison, the index of pay for the top two executives (chief executive plus chief financial officer (CFO) combined) has grown to 177 percent, indicating possibly that CFO’s have been less penalised by the implications of the recent bear market and a declining growth in earnings,” Deloitte said.
Mark Bussin, executive committee member of the South African Reward Association, said that it was necessary to contextualise executive pay as its increases have been on par and in most instances lower than the general workforce.
Investec’s Hendrik du Toit has received a £4.6m bonus.