Each of Centum’s 90 employees will get an everage of Ksh11.1 million in bonus for the year ended March 2015, Business Daily reports, after the investment firm more than doubled the bonus payout. This makes it one of the biggest bonus allocation in corporate Kenya.
The company’s bonus scheme, payable in three equal installments over three years, had accrued to Ksh431.3 million the previous year. Centum says in its newly released annual report that the 142.6% jump in bonus payment is attributable to the outperformance of pre-set annual benchmarks.
“The bonus is high because of the performance,” said Centum CEO James Mworia in an interview.
Centum’s board has set a target for the employees to raise shareholder funds or net assets by 15% each year. The employees are entitled to 20% of any return above the set benchmark, with the absolute payout also based on individual performance.
Centum’s net assets rose 39.1% to Ksh32 billion in the review period, beating the Ksh26.4 billion target. This created an excess of Ksh5.5 billion in absolute terms, from which up to Ksh1.1 billion was available for allocation to the staff.
While the average employee is entitled to about Ksh11.1 million, a breakdown of the payout shows the company’s top 10 executives will on average take home a higher pay cheque of Ksh34 million each. The executives’ bonus pool stood at Ksh340.5 million, nearly tripling from Ksh124.7 million the year before.
The number of top Centum managers rose from the previous seven to 10 as CEOs of recently consolidated subsidiaries, including Joyce Macharia (Almasi Beverages) and Titus Karanja (K-Rep Bank) joined the list.
The cash payout is not automatic and is subject to further conditions including maintaining or increasing the shareholders’ wealth each year. “Should there be a drop in shareholder wealth, payment will not be made and will be deferred until the year when shareholder wealth is restored,” Centum says in its latest annual report. Those who leave the company before being paid their bonus automatically forfeit the sums.
The company says the scheme is meant to balance the interest of shareholders and employees, who are driven to consistently match or beat the performance benchmark going forward for their cash entitlement to vest. “It focuses the staff on performance. Everyone at Centum works like they are running their own business,” said Mr Mworia.
