Nigeria’s Top 10 Highest-earning CEOs Received N3.5bn in 2019

Ferdinand Moolman

•MTN’s Moolman – N585.94m; Oando’s Tinubu – N568m; Seplat’s Avuru – N440m; GTB’s Agbaje – N399.7m

Obinna Chima

Chief Executive Officers (CEOs) of top 10 leading private sector organisations in Nigeria received a total of N3.478 billion ($8.918 million, at the I & E exchange rate of N390/$) as remunerations in 2019, data compiled from a report by Proshare Nigeria Limited, has shown.

The report, titled: “CEO Remuneration: Paying the CEO in a Pandemic, the Unanswered Questions,” which was obtained yesterday, showed that the top-earning CEOs are from diverse sectors of the economy.

It showed that at N585.94 million ($1.502million) per annum, the CEO of MTN Nigeria, Mr. Ferdinand Moolman, received the highest remuneration in the country in 2019.

He was closely followed by the Group CEO of Oando Plc, Mr. Adewale Tinubu, who earned a total of N568 million ($1.456million) per annum.

The outgoing CEO of Seplat Petroleum Development Company, Mr. Ojenekwu Avuru, who steps down today, after leading the company for 10 years, came third with a cumulative paycheck of N440 million ($1.128 million) per annum as remuneration.

The report listed the CEO of Guaranty Trust Bank (GTB) Plc, Mr. Segun Agbaje, with a total of N399.7 million ($1.025m) yearly earnings, as occupying the fourth position. He is also ranked as the highest-earning bank CEO in the country.

The Proshare report showed that the CEO of Unilever Nigeria Plc, Mr. Yaw Nsarkoh, who earned N302.52 million ($775,692), was placed on the fifth position, while Lafarge’s CEO, Mr. Michel Purchercos, with a total pay of N282.380 million ($724,051) was the sixth highest earning chief executive in the country.

Others are Mr. Jordi Borrut Bel, Nigerian Breweries Plc, N271 million; Mr. Mauricio Alarcon, Nestle, N218.08 million; Mr. Lars Richter, Julius Berger, N217.07 million; and Mr. Baker Magunda, Guinness at N193 million.

However, the report did not include other benefits such as bonuses and allowances earned by the CEOs, which are a lot more.

The report also revealed the weakness of the Nigerian economy compared with their counterparts in some advanced and developing economies who manage smaller firms but earn much higher.

For instance, findings by THISDAY showed that the highest-paid CEO in South Africa in 2019 was Mr. Alan Clark of SABMiller, who was paid 122 million rands ($6.782 million) per annum, about $2.136 million less than what the entire top 10 highest-earning CEOs in Nigeria were paid.

A sectoral analysis of the CEOs’ compensation showed that the top three highest-paid executives in the banking sector in 2019 were Agbaje; Mr. Emeka Emuwa of Union Bank of Nigeria Plc and Mr. Yinka Sanni of Stanbic IBTC Holdings Plc.
According to the report, Emuwa earned N172 million as remuneration while Sanni’s was N155 million the same year.

“In contrast to previous years, the highest-paid executives’ remuneration in the banking sector was not closely knitted to the profit generated in the year. The only exemption was GTBank, which recorded the second-highest profit before tax of N243billion in 2019 and consequently paid its director the highest remuneration in the sector.

“It is expected that the higher the profit a bank generates, the higher the remuneration that accrues to its executive directors. But this narrative has been incorrect for the banking sector in 2019. Stanbic IBTC Bank and Union Bank, which recorded a relatively lower profit before tax of N90.93 billion and N24.84 billion respectively in 2019, climbed up the ladder of the highest-paid executives in the sector,” the report stated.

For the oil and gas sector, it noted that even though financial result for the year ended 2019 was yet to be released for most firms in the sector, as at the time the report was compiled, financial results for 2018 was used instead with Tinubu as the highest-earning CEO.

“His compensation was 42.11 per cent higher than the highest-paid executive director in the banking sector, Agbaje of GTBank. The second-highest paid executive in the oil and gas sector was Avuru. Avuru took home an annual pay of N440 million, which was 29.1 per cent lower than Oando’s Tinubu, but 169.24 per cent higher than the third highest-paid executive director in the oil and gas sector, Mr. Imrane Barry of Total Nigeria Plc.

“Information on Ardova Plc (formerly Forte Oil Plc) CEO’s pay could not be ascertained as at the time this report was written. Therefore, the next in line was Mr. Imrane Barry of Total Nigeria Plc. Barry was the third-highest-pay earner in the industry with an annual remuneration of N163.42 million. Barry’s earning was 5.43 per cent higher than the third highest-paid bank CEO in Nigeria, which was Stanbic IBTC’s Yinka Sanni. In comparison with the banking sector, the oil sector still stands as a better rewarding sector,” it stated.

For the ICT sector, Moolman led the highest earners’ chart. James Agada of CWG Plc came in second place as the highest-earning CEO in the ICT sector. Agada’s annual remuneration was N47.2 million in 2019, which was 1,141.39 per cent lower than the remuneration earned by Moolman, it explained.

On the other hand, UACN Plc’s CEO, Mr. Abdul Bello, earned the highest among the listed conglomerates on Nigeria Stock Exchange, the Proshare report stated.
Bello’s annual remuneration in 2019 was N127.6 million, a significant rise of 212.36 per cent from his last year’s annual earnings.

According to the report, Mr. Adim Jibunoh lost his top spot to end second place as the highest-earning CEO among conglomerates listed on NSE in 2019. His annual remuneration, which was unchanged from 2018, was N100.21 million.

However, the report said CEOs in the healthcare sector recorded the second-lowest pay amongst the various categories of sectors listed on the NSE. The highest-paid executive in the sector was Fidson Healthcare Plc CEO, Mr. Fidelis Ayebae, who earned an annual remuneration of N40 million.

His annual remuneration grew significantly by 14.28 per cent in 2019.

GlaxoSmithKline Consumer Nigeria Plc’s CEO, Mr. Kunle Oyelana, was the second-highest earning CEO in the healthcare sector. Oyelana’s appointment as the new CEO of GlaxoSmithKline Consumer Nigeria Plc took effect from June 1st, 2019 and he earned an annual remuneration of N36.96 million in 2019.

Also, Neimeth International Pharmaceuticals Plc’s CEO, M.O Azoji, was the third highest-paid CEO in the healthcare industry. Azoji earned an annual remuneration of N28.34 million in 2019.

His annual remuneration was 41.14 per cent lower than Ayebae’s remuneration and 30.4 per cent lower than Oyalana’s remuneration in 2019.

“Corporate CEO’s in the agricultural sector listed on the Nigeria Stock received the lowest annual remuneration in the year under review. The highest-paid CEO in the sector was Mr. Graham Hefer, CEO of Okomu Oil Palm Plc, who earned an annual remuneration of N11.55 million. Hefer recorded an increase of 15.5 per cent in his annual remuneration, toppling CEO of Livestock Feeds Plc who was the highest-earner in the sector 2018.

“There was a change in management in Livestock Feeds Plc. Mr. Solomon Aigbavboa resigned on 31st July 2019. While Mr. Adegboyega Adedeji assumed office as the new CEO on August 1st, 2019. Adedeji received an annual remuneration of N10.03 million, which was 15.15 per cent lower than the annual earnings of Hefer, CEO of Okomu Oil Palm.

“Dr. Lars Richter, the managing director of Julius Berger, was the highest-earning CEO in the construction and real estate sector. He received an annual remuneration of N217.07 million. Richter’s pay was 32 per cent lower than his predecessor’s pay.

“There is a large variability among executive pay in the construction sector. The variability is largely attributed to differences in the size of the companies, assets, turnover, profit, etc. Ms. Folasope Aiyesimoju, managing director of UAC Property Development, received an annual remuneration of N19.62 million in 2019.

“She was the second-highest-paid CEO in the construction and real estate sector. Aiyesimoju earned 1,006.37 per cent lower than Dr. Richter’s annual remuneration of N217.07 million, which reflects the large disparity in earnings in the construction/real estate business,” the report said.

For the consumer goods sector, Mr. Baker Magunda of Guinness Nigeria Plc was the highest-paid CEO in 2018. This narrative was different in 2019, as Mr. Yaw Nsarkoh of Unilever Nigeria Plc earned the highest-annual remuneration. Nsarkoh earned an annual remuneration of N302.52 million. His earned remuneration declined by 8.6 per cent, as his remuneration declined from N331 million in 2018 to N302.52 million in 2019, the report added.

“Mr. Maurico Alarcon of Nestle was the second-highest-paid CEO in the consumer goods sector. Alarcon received an annual pay of N218.08m in 2019. His earnings grew by 4.19 per cent in 2019, as his earnings increased from N210 million in 2018 to N218.08 million in 2019.

“Mr. Jordi Borrut Bel, CEO of Nigerian Breweries Plc, was the third highest-paid CEO in the consumer goods sector. His earnings rose significantly from N190 million in 2018 to N271 million in 2019, an increase of 42 per cent.
Surprisingly, Guinness Nigeria Plc CEO, Mr. Baker Magunda, was the fourth highest-paid CEO in the consumer goods sector. Magunda recorded a significant decline in his annual earnings by 58.13 per cent, as his annual earnings declined from N461 million in 2018 to N193 million in 2019,” it added.
Proshare stated that the emergence of the COVID-19 pandemic gave credence to the necessity to study the trends of executive remunerations in Nigeria and how CEO remuneration was likely going to be impacted.

The firm anticipated that the pandemic would affect the revenues of firms listed on the NSE and hence eat deep into CEOs’ remuneration of top firms in Nigeria.

“Unlike in the previous year, where a majority of the top firm CEOs saw a rise in their annual remuneration, it is expected that these top firms will adjust pays from the top executives to the bottom staff to meet up with current realities of the economy.

“Measuring results against absolute goals is more common than relative performance measurement. The size of the average top corporate executive’s wallet has had a fairly mixed relationship with the size of corporate turnovers and their profit before tax (PBT).

“The basis for the remuneration of executives could not be ascertained, as there was no distinct relationship between executive pay and the financial performance of organisations. For example, firms like Seplat recorded improvements in Profit Before Tax (PBT) while its highest CEO’s pay declined.
Similarly, Unilever recorded a loss as high as N10 billion but its CEO remained one of the highest-paid executives in Nigeria.

“Most companies use more than one metrics to measure performance in their annual incentive plans. There were no major changes in the top highest-paid business executives from last year in Nigeria.

“Some of the notable changes include the spring forth of Nigerian Breweries executive as among the highest paid in Nigeria while Dangote Cement CEO did not make the list as its Group Executive Officer, Joseph Makoju, retired as a board member of the cement maker,” it added.