Safaricom CEO and board pocketed Ksh534m in 2022

According to Safaricom, the pay package, which totalled Ksh534 million, was Ksh62 million higher than the Ksh471 million Mr. Ndegwa and the board received in compensation the previous year.
According to documents by Safaricom, Mr. Ndegwa earned a gross yearly salary of Ksh313.11 million thanks to larger bonuses and a competitive remuneration plan. Compared to the Ksh288 million he received a year prior, this was Ksh24 million higher, or a gain of 8.37%.
As with other Kenyan corporations, Safaricom, the most successful business in east Africa, has been making every effort to keep its top executives and board members satisfied as well as to entice and keep them.
CEOs of blue-chip firms frequently receive privileges including opulent vacations, wardrobe allowances, cars and personal drivers, bodyguards, memberships to exclusive clubs, housing, entertainment allowances, and benefits for elite school fees.
According to Safaricom’s CEO remuneration policy, “in addition to the base income, the Executive Director is also entitled to an annual performance-based incentive, shares, housing, utility bill payment, and club membership.”
On 1 April, 2020, Mr. Ndegwa, 54, assumed control of Safaricom, making him the first Kenyan to hold the position. According to information provided by Safaricom, he received an annual salary of Ksh88.89 million, or the equivalent of Ksh7.4 million per month.
Additionally, he received non-monetary benefits totaling Ksh21.16 million and a cash bonus of Ksh178.88 million. Dilip Pal, the chief financial officer, earned a total of Ksh87.73 million in salary for the year.
This included a Ksh54 million annual pay, or Ksh4.5 million per month, in addition to a Ksh13.7 million bonus and Ksh19.91 million in non-cash benefits. Both the present and past directors of Safaricom received Ksh105 million in compensation during that time.
They included John Ngumi (Ksh10.97 million), Bitange Ndemo (Ksh5.88 million), and Michael Joseph (Ksh21 million).
Since leaving the company’s board, Prof. Ndemo and Mr. Ngumi have been replaced by new directors as a result of the restructuring.
The non-executive directors of Safaricom are paid fees; however, they are not eligible for pensions, bonuses, or long-term incentives like performance share plans.
The telco pays its board chairman and other non-executive directors a quarterly retainer fee that is paid annually.
For meetings of the board and board committees, it also provides seating allowances. It pays back expenses for travel, lodging, previously approved consulting fees, and other costs related to performing director duties.
Each non-executive director’s annual directors’ fees are fixed at Ksh3 million per year, while the annual directors’ fees paid to the board chairman are agreed to be Ksh8.5 million annually. A sitting allowance for each non-executive director is fixed at Ksh110,000 per meeting, while the chairman continues to receive a sitting allowance of Ksh230,000 per meeting.
According to Safaricom, it’s non-executive director compensation strategy is to pay non-executive directors “at the desired position, to pay at least at the 75th percentile of the market, this makes sure that the business can recruit and keep talented directors.”
As it’s voice business matures, Vodacom of South Africa and Vodafone of Britain, which share a portion of Safaricom, are under pressure to develop additional revenue streams.
Therefore, it has been looking to diversify its revenue streams, including voice, short message services, payments, and financial transfers. For the full year ended March 2023, Safaricom reported a 22.2% reduction in net profit, the company’s third consecutive decline in profitability.
The company attributed the decline to significant capital investments in Ethiopia and a challenging economic environment. Profit was reduced from the Ksh67.49 billion reported in the prior period to Ksh52.48 billion.