By Amina Faki
Banks listed on the NSE have increased their directors’ pay by 3.6 percent last year despite the fall in industry earnings.
This has reversed the previous year’s effort to keep board spending in check.
National Bank nearly doubled its fees to directors to 43.37 million shillings last year from the 24.88 million shillings it paid out in 2015.
The total remuneration of bank directors hit 1.15 billion shillings after seven out of the 11 publicly traded lenders led by troubled National Bank increased their boards’ pay.
In 2015 the director’s earnings had dropped 5.6 percent to 1.11 billion shillings as most of the lenders affected strong cost-cutting measures to improve profitability.
Directors in different banks earn ransom monthly retainers, sitting allowances for every board meeting or board committee meeting attended, travel allowances and per diem while away on official duties.
The shift in the lending mix has been mainly attributed to the coming into force of a law capping interest on loans at four per cent above the policy rate — currently at standing 10 per cent — last September.
The earnings have put the directors in the league of top bank owners who reaped a 13 percent rise in total dividend payout to 34.7 billion shillings compared to 30.8 billion shillings in 2015.
Higher paychecks come in the year in which the lenders shed more than 1,000 jobs through massive retrenchment of staff to cut costs.
Barclays Kenya attributed last year’s 5.9 per cent growth in its directors’ pay to an increase in emoluments to board members.
“The basic rates of fees paid to non-executive directors were increased by 10 per cent in Quarter 2 of 2016,” Barclays said in its latest annual report, which indicates that the directors earned 107 million shillings.
The following four banks did cut payments to directors, Equity, KCB, Stanbic Kenya and NIC Bank.