In Kenya, not too many people will refuse to accept a bonus pay, especially if that bonus pay amounts to tens of millions. But this is exactly what Equity Group chief executive officer Dr James Mwangi has done.
Dr Mwangi has refused to accept millions of cash that he was set to be paid as bonus for the banking group’s stellar performance in the financial year ended December 2023. And he has come out to give the reasons why he has refused.
According to Dr Mwangi, his refusal to accept the cash that would have been in the tens of millions stems from Equity Bank’s subsidiaries. “I declined my bonus in sympathy with our subsidiaries which did not qualify and I felt that I owed them a duty to have helped them to also qualify for the bonus,” Dr Mwangi told shareholders during the bank’s annual general meeting that was held last week.
Speaking during the meeting, Equity Group chairman Isaac Macharia noted that Dr Mwangi’s bonus payment is usually based on the performance of the entire banking group while that of the management and staff in subsidiaries is based on the performance of each respective unit.
“The Group reviewed the performance of the Group CEO and he had met the criteria for the bonus. The Group CEO felt that one of the major subsidiaries had not met the budget that he had promised the board and he felt that if employees in this subsidiary were not going to get rewards, it was not in line with his principles to accept a bonus payment,” said Macharia.
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In the bank’s financial year 2022, Dr Mwangi had pocketed a bonus payment of Sh. 53 million. His total pay for the year was Sh. 213.6 million. In the financial year 2023, he took home Sh. 158.8 million. This was inclusive of Sh. 106 million in salary, Sh. 31.8 million in gratuity, and Sh. 4.7 million in non-cash benefits.
From his shareholding in Equity where he is a prominent shareholder, Dr Mwangi will further receive Sh. 511.2 million in dividend earnings.
In the year 2023, Equity Group posted a full year profit after tax of Sh. 43.7 billion. The banking group proposed a record dividend of Sh. 15.1 billion for a second year running. The Sh. 4 per share dividend amounted to a 36 per cent payout of the Sh. 43.7 billion profit after tax or Sh. 11.1 earnings per share and a dividend yield of 11.9 per cent on the 2023 year-end closing share price of Sh.33.65 or 800 per cent on par value.