Bonus payouts for eight chief executive officers (CEOs) of Kenya’s listed banks soared 26.5 percent to reach Sh817 million on the back of record profits that also delivered higher dividends to shareholders.
The bosses of Co-operative Bank of Kenya, KCB Group, Equity Group, NCBA Group, Stanbic Holdings, I and M, Absa Bank Kenya and Standard Chartered Kenya increased their payouts from Sh645.91 million in 2024, regulatory filings show.
The bumper payouts cement the banking sector’s credentials for high rewards to its CEOs and top executives.
Co-op Bank managing director Gideon Muriuki topped the list with a bonus of Sh307.7 million, marking a growth from Sh302.3 million and the largest payout in the history of firms listed at the Nairobi Securities Exchange (NSE).
Rival KCB Group said in its annual results that it paid chief executive Paul Russo Sh158.09 million last year, up from Sh131.69 million in 2024.
The DTB Group and HF are the listed banks that did not declare bonuses for their executives.
Banking executives receive salaries, bonuses and stock-linked awards.
The pay awards, therefore, also reflect the Kenyan banking system’s profit-making machine, which has seen the sector defy economic downturns to post stellar earnings.
The country’s lenders have posted large profit boosts as interest rates have increased, with the eight banks’ earnings growing 16.5 percent to Sh268.97 billion last year.
Central Bank of Kenya data shows that combined pre-tax profits of banks operating in the country rose 18.8 percent to Sh311.8 million, continuing the trend of rising earnings.
This helped the lenders pay record dividends that have made their stocks the most sought after at the Nairobi bourse.
During the review period, dividend payouts from the nine top banks hit Sh111.2 billion, representing a 31.6 percent growth from Sh84.5 billion distributed from the 2024 net earnings.
Co-op Bank’s Muriuki’s bonus came in a year when the bank posted a 16.9 percent rise in net profit to Sh29.75 billion, allowing the firm to raise its dividend per share for the first time in four years to Sh2.50 from Sh1.50.
KCB Group, which posted an 11 percent rise in net profit to Sh68.4 billion, disclosed that it paid its CEO, Mr Russo, the Sh158.09 million bonus, including Sh118.57 million in cash and a deferred Sh39.52 million.
Equity Group, which posted a 54.6 percent rise in net profit to Sh71.9 billion to top the profitability chart, rewarded its CEO, James Mwangi, with a Sh90.8 million bonus after a two-year break. He got a bonus of Sh53.04 million in 2022.
NCBA Group rewarded its managing director, John Gachora, with a Sh92 million bonus, up from Sh83 million in the previous year. The lender said SSh82 million was paid during the year, while Sh10 million was deferred.
‘Directors’ remuneration is linked to performance and is competitively structured to attract and retain the best talent to effectively develop the group’s business,’ said the bank in the latest annual report.
‘Executive directors are eligible to participate in the group’s bonus scheme, which is anchored on achievement of key business performance indicators, but are not entitled to earn fees or other allowances.’
Besides the bonus for his CEO role, Mr Mwangi is also in line for a Sh734.9 million dividend on his 127.8 million shares in Equity. The lender lifted the dividend per share to Sh5.75 from Sh4.25 in 2024.
Mr Mwangi has helped Equity cement its position among the top banks in the region from just a building society that was nearly collapsing on the back of mergers and acquisitions.
During his 24-year tenure as CEO, few stocks have matched Equity in generating wealth for long-term investors.
Stanbic Holdings says it paid CEO Patrick Mweheire a Sh78.39 million bonus, up 75.7 percent from Sh44.62 million, coming before his retirement in February this year. The bonus came in the year the lender’s net profit remained relatively flat, rising to Sh13.72 billion from Sh13.71 billion.
However, Stanbic says its incentives scheme considers a performance of three to five years to ensure it rewards sustainable performance as opposed to a ‘short-term bonus-centric culture.’
‘The committee [handing the incentives] reviews performance to ensure that earnings are not the result of one year’s work but rather the planned outcome of work done in the past years,’ said the bank.
Absa, whose net earnings grew 10 percent to Sh22.9 billion, rewarded its managing director, Abdi Mohamed, with a Sh38.45 million cash and deferred bonus, representing an increase from Sh32.27 million in the previous year.
StanChart Kenya CEO Kariuki Ngari, who retired in April, earned a Sh37.47 million bonus, marking 14 percent drop from Sh43.58 million. The drop in the bonus came in the period the lender’s net earnings dropped by 38 percent to Sh12.43 billion, partly on the settlement of a Sh2.6 billion legacy pension liability.
At I and M Group, the regional CEO Kihara Maina saw his bonus rise 71.9 percent to Sh14.53 million from Sh8.45 million as that of group executive director Sarit Raja Shah increased by 23 percent to Sh26.26 million from Sh21.36 million.
The higher bonuses came in the year I and M net earnings grew 27.6 percent to Sh18.78 billion.
Many lenders have openly linked their performance-based bonus scheme, which extends to all staff, to the continued rise in performance even in challenging economic times.
For instance, Co-op Bank says the performance-driven system has helped the bank rise from a Sh2.3 billion net loss to the current streak of profit.
‘A key pillar of this transformation has been the board of directors successfully implementing a performance-based bonus reward system applicable to all staff, both management and unionised staff, wherein the individual salary review/increase for the year and the bonus award each year is directly linked to attainment of the profitability performance targets for the year,’ said Co-op Bank in the annual report.
The banks’ bonuses extended to other senior executives, including subsidiary CEOs and finance officers. KCB said the bonus to its chief finance officer (CFO), Lawrence Kimathi, rose to Sh68.77 million from Sh56.68 million, while the bonus paid to NCBA executive director for finance, David Abowoga, fell to Sh12.82 million from Sh14.84 million.
The combined bonus to Co-op Bank’s Muriuki and the divisional directors and managing directors of the subsidiaries hit Sh635.13 million from Sh618 million.
Over the same period, Absa’s chief finance officer, Yusuf Omari, earned a bonus of Sh24.99 million from Sh20.55 million, underlining the significance of the finance director’s role in the success of organisations.
Chemutai Murgor, StanChart’s former CFO who exited in April this year, earned a Sh14.14 million bonus, while Birju Sanghrajka, who replaced Mr Ngari in the CEO role, received Sh28.96 million in his previous role of heading corporate and investment banking.