Best banking CEOs in South Africa: pay vs profit

South Africa’s bankers are some of the biggest earners in the country, pulling in tens of millions of rand in salaries each year.

And while their salaries may seem outrageous to the rest of the country – and even their shareholders – banking executives oversee some of the largest corporate institutions with the biggest profits in the country.

Looking at the basic guaranteed salaries of SA banking CEOs, the companies they lead make thousands of rands in profit for every rand paid to them in remuneration. However the full picture is only seen once bonuses and incentives are added into the mix.

Various banks, such as Standard Bank and FirstRand have argued that it is inaccurate to include incentives paid to executives in a salary vs profit comparison for any given year – this is because shares are given and exercised at different times, and do not necessarily reflect, or are tied to, the year being assessed.

This is of particular note in the case of Capitec, whose CEO Gerrie Fourie saw a massive jump in salary in 2016 – due to a long term investment payout – to R35.6 million. This puts the CEO’s salary-to-profit ratio at R90 profit for every rand paid.

In previous years, without the presence of such a large bonus, the ratio is far higher, at R247 in 2015 being one example.

Salary vs Proft

Incentives and bonuses – while promised in different financial years – are however, paid out in a given financial year, and thus impact the bottom line for shareholders in that year.

The banking executive with the best salary-to-profit ratio is FirstRand CEO Sizwe Nxasana, whose R33.42 million salary in the full year of 2015, provided R647 in profit for every rand he earned the group that year (attributable profit: R21.6 billion).

When looking at retail banking alone – put against FNB’s profit for the group, Nxasana’s ratio drops to R320 for every rand earned, pushing Absa CEO, Maria Ramos to the top, earning R508 for every rand in her salary of R28.2 million.

The table below details the salary-to-profit ratio of South Africa’s big five banks, calculated by diving attributable profit by each CEO’s total earnings (including bonuses and incentives) for the latest full financial year.

Bank CEO(s) 2015 Salary (R’000) 2015 Attributable profit (Rm) Salary-to-profit ratio
FirstRand Sizwe Nxasana 33 423 21 623 R647
Absa Maria Ramos 28 209 14 331 R508
Standard Bank Sim Tshabalala and Ben Kruger 61 774 23 458 R380
Nedbank Mike Brown 36 425 10 831 R297
Capitec Gerrie Fourie 35 597 3 213 R90

More on banking salaries

2015: Banking salaries in South Africa: CEOs get massive pay hike

2014: Highest paid banking CEOs in South Africa

2013: What SA’s banking CEOs earn

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Best banking CEOs in South Africa: pay vs profit