R100 million payday for the CEOs of Standard Bank and Absa ... here’s why

STANDARD Bank and ABSA - two of the country’s big four banks - have handsomely rewarded their chief executive officers with big pay days after strong performances as seen in their financial year end results.

Standard Bank CEO Sim Tshabalala and his ABSA counterpart, Arrie Rautenbach, were paid R123 million between them.

Together, their pay for 2023 could fund the annual salaries of over 500 of their lowest paid workers.

Tshabalala’s total remuneration package increased from R55.7 million in 2022 to R83.3 million in 2023, while Rautenbach earned R40.03 million, a R4.75 million decline from his 2022 remuneration of R44.78 million.

Banks generally release their financial results at the end of March, with these often containing the substantial compensation packages they pay out to their chief executives.

Standard Bank said in its financial year end results for the full year ended December 31, 2023, that its headline earnings increased by 27% from R33.9 billion in 2022 to R24.9 billion in 2023.

This strong performance was underpinned by a robust and growing franchise system.

The Africa Regions franchise contributed 42% to group headline earnings.

The top eight contributors to Africa Regions' headline earnings were Ghana, Kenya, Mauritius, Mozambique, Nigeria, Uganda, Zambia and Zimbabwe, Standard Bank said.

Tshabalala was rewarded with a major bump in earnings for the strong performance, with a R27 million increase in earnings. Tshabalala total remuneration package increased from R55.7 million in 2022 to R83.3 million in 2023.

This translated to around R228,230 per day for Tshabalala.

In comparison, Standard Bank told IOL its lowest-paid employee was paid a minimum banking guaranteed package of R244,900 per year, with effect from March 2024. The bank said the package excludes annual discretionary bonuses which are determined on an individual basis.

This means that Tshabalala’s 2023 earnings of R83.3 million could fund the salaries of 340 of the banks lowest paid employees.

Tshabalala’s increases were directly linked to the vesting of the long-term performance reward plan (PRP) created by Standard Bank.

The PRP award to be made to the CEO in March 2024 and will increase by 8% from the prior year.

Tshabalala saw his PRP award increase from R25.8 million in 2022 to R47.6 million in 2023.