R50 million payday for Discovery Bank CEO – R20 million more than his boss

Discovery Bank CEO Hylton Kallner received a R50 million payout despite the bank still making a loss.

For the year ended 30 June 2024 (FY2024), Kallner received R50 million in remuneration, including an R8.1 million basic salary, R18.4 million in long-term incentives, and a R22.7 million performance bonus.

Notably, the normalised loss for Discovery Bank over the period stood at R454 million.

However, this was a 41% improvement from the prior year.

Discovery Bank has consistently narrowed its losses since its launch, posting an operating loss of R1.2 billion in 2020.

The operating loss of R454 million in 2024 shows an overall reduction of 60% over the last five years.

Discovery Bank’s total client base grew 36% to June 2024, reaching the one million client target well ahead of its “by 2026” target.

The group said it remained focused on high-quality growth and customer priority, with deposits increasing by 29%.

Non-interest revenue increased 45% year-on-year to R7.9 billion due to client growth, product take-up, and the resulting fee income per client. Net interest income reached R779 million.

Although Discovery Bank looks like it’s heading in the right direction, Kallner still earned roughly R20 million more than Discovery Group CEO and founder Adrian Gore.

Gore had a slightly higher base salary than Kallner, but his long-term incentives (R11.3 million) and performance bonus (R9.1 million) were far lower than his counterpart.

That said, Vitality UK CEO Neville Koopowitz had the highest pay package at the group, earning R78.6 million.

However, Koopowitz is based in the UK and earns in pounds. Even when ignoring his R48 million bonus, Koopowitz’s base salary was R24.2 million, roughly triple that of Gore and Kallner.

Discovery Group CFO Deon Viljoen took home R23 million for the year, while Barry Swartzberg, the former CEO of Vitality Global, earned R22.5 million.

The group recently announced that it has merged its Vitality UK and Vitality Global businesses into one.

On top of his current role, Neville Koopowitz has become Vitality’s CEO.

Swartzberg is now working directly with Adrian Gore, the Group’s CEO and founder, to drive the group’s growth.

The pay packages of the five executive directors for the most recent financial year can be found below:

How the overall group is performing

In its latest financial results, Discovery said that it macroeconomic complexities characterised the the FY2024 year.

Global inflation rates may have dropped from the prior year’s highs, but cumulative interest rate increases added to heightened consumer pressures in many regions, constraining economic growth.

Although there was uncertainty in South Africa, the group said that the formation of the Government of National Unity led to massive shifts in confidence, with immediate relief seen with many market indicators.

“The National Health Insurance (NHI) Act, which was signed over the period, is not workable in its current form; however, the group is engaging at multiple levels to facilitate a viable journey to universal
healthcare coverage in South Africa,” said the group.

“In the United Kingdom (UK), fiscal challenges and the knock-on impact on the National Health Service (NHS) backlogs accelerated the demand for, and utilisation of, private medical insurance (PMI).”

“Many markets in Asia experienced post-COVID-19 recoveries; however, China continued to face significant macroeconomic and growth constraints.”

Normalised profit from operations increased by 17%, with sales contributions from Discovery SA and Vitality Global increasing by 16% and 57%, respectively.

That said, Vitality UK saw a 14% decline in normalised profit from operations and was impacted by two main issues: the claims experience in VitalityHealth and a basis strengthening for the back book under VitalityLife.

Normalised headline earnings per share grew by 15%, while headline earnings increased by 7% due to considerable prior-period fair value gain from the UK interest rate swaption.

The group increased its final dividend by 38% to 152 cents per share.

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