Absa bosses score R165 million payday

Absa executives earned a combined R165 million in remuneration in 2024 amidst a series of leadership changes.

The 2024 financial year was a relatively strong year for Absa. The group said that the outlook for South Africa improved following the formation of the GNU and the reduction of load shedding.

These factors led to improved business and consumer confidence. Inflation also improved, allowing interest rate cuts in September and November 2024.

However, the performance of the group’s Africa Regions was notably different. East Africa performed well, but Zambia and Mozambique were hit by drought and unrest, respectively.

The group’s headline earnings also jumped by 10% to R22.059 million. The group thus increased its dividend per share by 7% to 1,460 cents per share, achieving a payout ratio of 55.%

South African headline earnings jumped by 14% to R15 billion, while the Africa regions remained flat at R6 billion.

Revenue for the period jumped to R109.9 billion, as net interest income increased by 4% to R71.1 billion. Non-interest income increased by 6% to R38.8 billion.

The group also benefited from an improved credit outlook. Its credit impairment charges decreased by 8% to R14.3 billion, improving the credit loss ratio from 1.18% to 1.03%

The lower charges reflected better early-stage performance in the Product Solutions Cluster and Everyday Banking, as the South African retail cycle and management implemented risk reduction strategies.

Big paydays

The group’s improved performance comes amidst several notable leadership changes, as Charles Russon was named Interim Group CEO following the departure of Arrie Rautenbach.

Russon served as the CEO of Corporate and Investment Banking (CIB) before taking on the interim role.

Russon’s single-figure remuneration at the group remained relatively unchanged, increasing from R29.7 million in 2023 to R29.8 million in 2024.

Total single-figure remuneration includes fixed remuneration, short-term incentives and long-term incentives.

Russon’s short-term incentive includes his performance as CEO of CIB from 1 January to 14 October 2024, and Interim Group Chief Executive Officer from 15 October to 31 December 2024.

Russon will not stay on as CEO of the Group as Kenny Fihla will take over, having served as the Deputy CEO of the Standard Bank Group and the CEO of Standard Bank of South Africa.

Fihla will join the group in June and work closely with Russon to ensure a smooth leadership transition.

Former Group CEO Arrie Rautenbach’s single-figure remuneration package decreased heavily from R37.5 million in 2023 to R23.4 million in 2024.

His fixed remuneration was prorated for the period during which he served as the executive director in 2024, while no short-term and long-term incentive awards were granted to him.

The group’s Financial Director position also changed hands, with former Group Chief Risk Officer Deon Raju taking over. Raju’s remuneration for 2024 stood at R17.7 million.

Christopher Snyman, the Interim Group Financial Director before Raju’s appointment in April, saw his single-figure remuneration drop slightly from R9.5 million to R9.1 million.

Former Financial Director and newly-appointed Nedbank CEO Jason Quinn resigned from Absa in November 2023.

He thus saw no remuneration in 2024 and was awarded short- or long-term incentives in 2023.

Newly appointed cluster CEOs Christine Wu, who heads the Everyday Banking cluster, and Yasmin Masithela, the Interim CEO of CIB, received R11.6 million and R17.5 million, respectively.

Faisal Mkhize, CEO of Relationship Banking, saw his remuneration package increase from R15.8 million to R17.5 million, while Geoffrey Lee’s package jumped from R16.1 million to R19 million.

Saviour Chibiya, the CEO of Absa Regional Operations, saw his package decrease slightly from R16.9 million to R16.8 million.  

After being replaced by Wu, former CEO of Everyday Banking, Cowyk Fox’s package dropped from R15.5 million to R2.6 million.

Overall, when including the several leadership changes at the group, Absa’s total single-figure remuneration for its major executive increased from R149.9 million in 2023 to R164.9 million in 2024: