Nigeria’s largest bank by market capitalization and profits Zenith Bank paid out a total executive compensation of N1.08 billion down from N1.2 billion in 2020.
Executive compensation refers to the salaries and benefits paid to executive management of multinationals and quoted companies. The figures are disclosed in the financial statement of companies.
Zenith Bank’s latest disclosure is a marked drop from the executive compensation reported in 2019 when the bank paid out over N2 billion to its top executives. A closer look indicated Zenith has reduced the number of its executive directors of the group (not the bank) has gone from 12 in 2019 to 15 in 2020 and then slashed to 6 in 2021.
Zenith Bank disclosed it has a salary package for directors that include basic salary (paid monthly), other allowances (paid periodically during the year), productivity bonus (paid annually in arrears), director fees (paid during AGM), and sitting allowances (after board meetings).
Executive Compensation breakdown
- In 2019, the group disclosed its executive compensation was N2.04 billion based on 12 executive directors. Fees and sitting allowances also printed N405 million taking the total directors’ emoluments to N2.448 billion.
- In 2020, the group reported its total executive directors of 15 cost it an executive compensation of N1.25 billion while sitting allowances and retirement benefits cost N409 million and N13 million respectively. In total it spent N1.67 billion on its directors’ emoluments.
- In the latest report for 2021, executive directors were just 6 costing the group N1 billion in executive compensation. Fees and sitting allowances cost N568 million while retirement benefits cost N9 million taking total directors’ emoluments to N1.66 billion.
- Zenith Bank’s Group MD/CEO was paid N246 million in 2021 compared to N230 million reported in 2020.
Zenith Bank’s board composition
According to the bank, its Board is made up of a Non-Executive Chairman, six (6) Non-Executive Directors, and six (6) Executive Directors including the GMD/CEO. Four (4) of the Non-Executive Directors are Independent Directors
- The Group Managing Director/Chief Executive is responsible for the day-to-day running of the Bank and oversees the Group structure.
- He is assisted by the Executive Committee (EXCO).
- EXCO comprises the Executive Directors, Deputy Managing Director as well as the Group Managing Director/Chief Executive as its Chairman
- The executive directors of the bank are Mr. Umar Shuaib Ahmed, Temitope Fasoranti, Mr, Dennis Olisa, and Mr. Henry Oroh. MD/CEO remains Ebenezer Onyeagwu and DMD Dr. Adaora Umeoji.
Why the drop in executive compensation?
A cursory review of the financial statement of the bank indicates the drop may be due to how the bank classifies its executive directors.
- In the financial statement for 2019 and 2020, it reported its executive directors for both the group (bank plus subsidiaries) and the bank with the latter having just 6 executive directors.
- However, in 2021 it only reported 6 executive directors for both the group and the bank. It is unclear why this is so, though we suspect they may have been reclassified as management personnel.
Overall key management compensation for the year was N2.1 billion in 2021 compared to N2 billion in 2020. Zenith has a total of 420 management staff (excluding directors).
Zenith Bank reported its biggest-ever profit on Monday posting a profit after tax of N244.5 billion.