Nedbank and First National Bank - two of the country's largest four banks - have handsomely rewarded their chief executive officers in 2023 after strong performances as they are set to leave their current positions with over R135 million between them.
Their staggering pays could fund the salaries of over 650 of their lowest paid employees between them.
Nedbank CEO Mike Brown had an unbelievable 2023 and was rewarded with a bumper R92.5 million for the year.
He will vacate his position at the end of May to make way for Jason Quinn who will become the new CEO of Nedbank.
Brown will remain with the bank in an advisory role until August 2024.
His salary can be broken down as follows:
- Base salary - R10.144 million
- Short-term incentive (STI) and bonus - R18.275 million (with 50% over R1.5 million deferred into shares, released over 30 months and matched if still invested in the Matched Share Scheme at 36 months)
- Long term incentive (LTI), a single figure vesting from March 2021 - R53.327 million
- Matched Share Scheme single figure vesting - R3.545 million
- Dividends - R7.209 million
According to Nedbank, all these amounts are before tax. Brown pays a marginal tax rate of 45%.
The bank said that the original face value of the LTI award, made in March 2021 to Brown, was R26 million.
This consisted of a standard annual LTI award of R16 million, plus an additional once off award of R10 million.
This additional award was made on a highly selective basis to critical and scarce talent and was necessitated to address the motivational and retention risks arising from the low expected vestings (actual of 0%) of the 2020 LTI awards to Group Exco members.
“This low vesting was because of the impact of Covid-19 on the relevance and ability to meet the corporate performance targets that were set shortly before its onset and Nedbank did not restate any of these corporate performance targets; Covid-19 also contributed to unusually low levels of vesting on the 2019 (which vested at 15%) and 2018 LTI awards (which vested at 18,1%) also because of the impact of Covid-19,” Nedbank explained.
The R26 million LTI award vested three years later at a value of R53.327 million. This and can be attributed to the share price appreciation between the award and vesting of 67%, valued at R20.879 million (over and above the original R26 million).
Moreover, Nedbank said that corporate performance over the three-year vesting period above the target levels set in the corporate performance targets was attached to the LTI award in March 2021.
“Consequently, the number of shares awarded in March 2021 increased by 24.8% on vesting, for group exco members. In the previous year, 2022, the achievement of corporate performance targets was below the minimum vesting threshold, and consequently no shares from the 2020 LTI award vested,” the bank explained.
What does the lowest paid worker earn at Nedbank?
Nedbank said that they try to make sure each person working at the institution has a “decent living wage”.
Nedbank’s minimum annual salary is R225,000 per annum, effective from April 2024. This is an increase of 7.1% from 2023, which was R210,000 per year.
Taking this into account, Brown’s salary of R92.5 million could fund the salaries of around 411 of the bank’s lowest-paid employees.
Jacques Celliers
FirstRand said in its annual remuneration report for 2023 that Jacques Celliers, the CEO of FNB received R44.5 million in 2023.
Celliers’ remuneration can be broken down as follows with him receiving R8.7 million as a guaranteed pay. The FNB head also was awarded R18.2 million as a short-term annual incentives and received R7 million as a cash payment.
He also received R3.03 million as a cash deferred payment and “share price linked” amount to the value of R8.1 million. Celliers was also given R17.6 million as his LTI.
Celliers is also leaving his role as CEO at the end of April.
But unlike Brown, Celliers is not retiring but has been moved to head up FirstRand’s financial technology department.
His new role would consist around developing new strategy and revenue streams that would help supplement the bank’s revenue streams.
What does the lowest paid worker earn at FNB?
According to FNB, the new minimum guaranteed package for banking roles at the bank is R198,500 per annum with effect from August 2023.
Taking this into account, Celliers’s salary of R44.5 million could fund the salaries of around 224 of the bank’s lowest paid employees.
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