Massive payday for FNB CEO and other FirstRand execs

Financial services group FirstRand has published its annual results and annual report for the full year ended June 2022, revealing the remuneration of its executive team.

The group’s results showed a return to pre-Covid-19 levels, and then some, with net interest income of R67.86 billion for the year, up 5% from R64.5 billion the year prior. Headline earnings were recorded 22% higher at R32.82 billion, with the group’s normalised net asset value up 9%.

FirstRand CEO Alan Pullinger said that the group’s performance reflected the quality of its operating businesses, FNB, RMB, WesBank and Aldermore.

“Disciplined execution on strategy has continued to drive shareholder value. Earnings have fully recovered and are significantly above peak 2019 levels, and economic profits have more than doubled.

“The ROE at 20.6% remains well situated in the target range. In addition, the group has declared the highest annual dividend in its history of 342 cents per share, as well as a special dividend of 125 cents per share. This resulted in a total distribution to shareholders of R26.2 billion,” he said.

The group rewarded its executive team for the exceptional results, with short-term bonus payouts reaching almost 300% of guaranteed pay in some cases, based on individual scorecards. Year on year STI growth was at 26% for the executive team.

As group CEO, Pullinger was the highest paid on the team taking home a total pay package of R48.29 million for the year, including the value of long-term incentives awarded in 2020 and 2021. As a single pay figure – the amount he received – was lower at R29.87 million.

FNB CEO, Jacques Celliers, was the second highest paid- a R41.61 million package. This was almost R30 million when accounting for vested LTIs.

“Jacques demonstrated highly effective leadership as FNB delivered solid revenue and balance sheet growth whilst ensuring superior returns,” FirstRand said.

“Anchored to the group’s overall balance sheet strategy, retail new business origination focused on low-risk customers. This resulted in muted year-on-year growth in advances. However, the focus on core customers ensured that the transactional franchise performed well, underpinned by active customer acquisition, growth in customer activity and higher transactional volumes.”

FNB was the biggest revenue generator for the group, accounting for R19.636 billion of its total normalised earnings.

The only other executive to command a higher salary than Pullinger and Celliers was Aldermore CEO, Steven Cooper, who was paid in pounds.

The year under review was the first full year Cooper had been in the position and, despite dealing with several operational challenges in the business, managed to execute key strategies to deliver on the group’s objectives, FirstRand said.

“These changes are starting to impact the business positively, as can be seen in the performance in the year under review.”

The single pay figure reflects the value of the vested LTI, rather than the total value awarded.

* Rand equivalent at 15-09-2022 of GBP2.46 million and GBP1.92 million. The Single figure does not reflect any LTI vested.

Read: FNB reports strong growth as it nears 11 million active customers