Former FirstRand group CEO Sizwe Nxasana. Picture: MARTIN RHODES
Former FirstRand group CEO Sizwe Nxasana. Picture: MARTIN RHODES

FirstRand executives and former executives of the group pocketed R127.7m as options, shares and bonuses awarded two and three years ago vested during its 2017 financial year.

Former CEO Sizwe Nxasana was the most handsomely paid, taking home R32.1m after his long-term incentive shares and performance shares awarded in 2014 and 2015 matured in September 2016, according to the banking group’s annual report released on Tuesday.

Nxasana retired in 2015.

Incumbent Johan Burger was not too far off, with R29.1m in vested incentives, followed by deputy CEO Alan Pullinger at R20.9m. FNB CEO Jacques Celliers raked in R13.4m, Wesbank boss Chris de Kock R11.4m, RMB’s James Formby R11m, and group chief financial officer Harry Kellan R9.7m.

FirstRand investor relations head Sam Moss said the shares accrued at average market values at the time of vesting. Business Day calculated these numbers using the closing market prices on the date of each vesting date disclosed in the annual report, assumptions that Moss said were fair.

The rigorous health checks we apply are demonstrated here and, in my view, have been consistently applied through the years and have directly driven the outperformance our shareholders have enjoyed
Laurie Dippenaar

The value of the incentives at R127.7m have surpassed their value at the time of award, which FirstRand placed at R86.6m in its disclosure of executive directors and prescribed officers’ variable pay. The R86.6m excludes Formby, whose remuneration before 2016 was not disclosed.

To unlock the long-term incentives, the FirstRand remuneration committee set a minimum earnings target of nominal GDP plus 1.5% for its executives in 2013. FirstRand’s average growth in normalised headline earnings per share over the four years since the inception of the long-term incentive scheme reached 16%, above the cumulative growth in GDP plus 1.5% figure of 11.8%.

Analysts approached by Business Day said they had not read the annual report and could not comment on the banking group’s remuneration policy.

But FirstRand chairman Laurie Dippenaar was comfortable with the banking group’s remuneration policy, as it had three "health checks" to keep pay in line. These included guaranteeing long-term performance through a large "deferred" portion of executive pay, Dippenaar said. Burger, for example, was paid just R7.7m in salary and other benefits during the year that his 2013 long-term incentives were awarded.

"The rigorous health checks we apply are demonstrated here and, in my view, have been consistently applied through the years and have directly driven the outperformance our shareholders have enjoyed," he said.

maakem@bdfm.co.za

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