FirstRand and FNB bosses score big payday

Financial group FirstRand has published its annual report for 2019, showing how much money their top executives earned over the past year.

Group chief financial officer (CEO) Alan Pullinger took home a final paycheque of R49.8 million for the year, up from the R49.4 million paid to his predecessor, Johan Burger, in 2018.

Pullinger’s pay includes a basic salary of R8.87 million, up 21% from 2018, a short-term incentive (STI) bonus of R22.4 million, and a long-term incentive (LTI) payout of R18.5 million.

Chief operating officer Mary Vilakazi received a total of R46.5 million, including a once-off sign-on bonus of R21.5 million, and R25 million for her work at FirstRand in 2019.

Group financial director, Harry Kellan, earned R29.7 million for the year.

First National Bank CEO, Jacques Celliers was paid R36.7 million for the year, comprising a basic salary of R7.7 million, and STI and LTI bonuses of R14.6 million and R14.5 million, respectively.

Celliers was paid R29.3 million in the 2018 financial year.

Overall, the group paid its top seven executives a total of R277 million, including R37.7 million to Aldermore Bank chief executive, P Monks, who was paid in British pounds, and R17.3 million to former chief executive, Johan Burger, who retired from FirstRand in 2018.

Aldermore Bank, located in Reading, United Kingdom, is a retail bank which provides financial services to small and medium-sized businesses. It was acquired by First Rand in March 2018.

Excluding the Aldermore salary and Burger’s final payout, the total for the top six executives in South Africa amounted to R221.5 million.

The table below outlines what FirstRand’s top executives got paid in the latest financial year, including total rewards (including the value of LTIs awarded in the year).

(Values are ZAR’000)

Executive Role Basic Salary STI award LTI award Total Award
A Pullinger Group CEO R8 865 R22 400 R18 500 R49 765
M Vilakazi Group COO R28 250* R9 750 R8 500 R46 500
H Kellan Group FD R7 385 R10 334 R12 000 R29 719
J Formby CEO RMB R3 861 R24 000 R8 300 R36 161
J Celliers CEO FNB R7 651 R14 574 R14 500 R36 725
C de Kock CEO WesBank R5 275 R7 500 R9 844 R22 619
P Monks CEO Aldermore £815 £570 £633 £2 018
ZAR** R15 238 R10 657 R11 835 R37 731

* Includes once-off sign-on award of R21.5 million
** Conversions done at 1 GBP = 18.70 ZAR

Financial performance

The large executive pay comes on the back of a strong financial performance from FirstRand, which published its year end results in September 2019.

FirstRand said its portfolio of businesses produced resilient growth in the period, despite local economic headwinds.

Headline earnings climbed 5% higher to R27.9 billion, while basic and diluted headline earnings per share were also 5% better at 497.2 cents per share. Normalised return on equity (ROE) was at 22.8%.

Group non-interest revenue (NIR) increased 6%, a resilient performance given the lack of private equity realisations compared to the prior year (realisations down 80% year-on-year).

The bank reported strong fee and commission income growth of 9%, supported by higher volumes across FNB’s digital and electronic channels and ongoing customer growth in the premium and commercial segments.

FNB continued to be the biggest driver of revenue in the group, accounting for 63% of the normalised earnings contribution – up from 60% in 2018.

Total customer growth was up only 1% year on year, with a 4% decline in consumer banking. However, this was countered by a 17% increase in premium banking clients, and an 11% jump in commercial clients.

The drop in consumer banking was driven largely by conservative credit risk appetite and ongoing upward migration to premium accounts, the group said.

Read: Meet the South African bosses who earn around R140,000 a day

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FirstRand and FNB bosses score big payday