The average salary earned by chief executives of some leading companies in Nigeria dropped by -11.62 per cent to N332.49 million in 2021, compared to N376.19 million in 2020, a new report obtained on Wednesday revealed.
The report, “CEO Remuneration 2022: CEOs in a Post COVID Era – What Matters Most,” which ranked the executives with respect to their pay packages, was authored by Proshare.
The report stated that for 2021, there were several drastic changes in ranking as new companies emerged while some dropped from the list, causing the average salary earned by the CEOs for the year under review to decline.
Nonetheless, a large proportion of the 10 highest-paid CEOs were in the consumer goods sector even as most sectors were represented on the list.
The report revealed that the top five highly remunerated CEOs emanated from Dangote Cement, Seplat Energy, Julius Berger Nigeria, MTN, and Dangote Sugar Refinery respectively.
Also, the bottom five on the top 10 earning CEOs included Lafarge Africa, Zenith Bank Plc, Nigerian Breweries, Guinness Nigeria, and Unilever Nigeria Plc.
According to the top-10 highest paid executives’ rankings, Michel Purcheros of Dangote Cement with N531 million as basic salary, displaced the CEO of MTN, Karl Toriola from the first position, rising from third position in the previous edition.
Roger Thompson Brown of Seplat was ranked second with N475 million, while Julius Berger’s Lars Richter was third with N408.91 million.
Toriola emerged fourth with N368 million as basic salary while Ravindra Singhvi of Dangote Cement emerged fifth with N289.71 million.
According to the ranking, the top three earners – Purcheros, Brown and Ritcher – earned a combined salary of N1.41 billion, representing a -5.37 per cent decline from the N1.49 billion combined earnings of top three earners in the previous ranking.
Proshare further stated that combined earnings of the top three CEOs exceeded the N1.25 billion jointly earned by the bottom five by 162.64 million, representing an increase from preceding year’s gap of N106 million.
However, the bottom five on the top 10 earning CEOs included Lafarge Africa, Zenith Bank Plc, Nigerian Breweries, Guinness Nigeria, and Unilever Nigeria Plc.
Lafarge’s Khaled Abdel Aziz El Dokani was sixth on the ranking with N288.61 million, while Zenith Bank’s Ebenezar Onyeagwu earned N246 million at the seventh place.
Others were Hans Essaadi of Nigerian Breweries with N243.09 million at eighth position, Guinness’ Baker Magunda at ninth position with N243 million and Unilever’s Carl Cruz at the 10th position with N231.57 million.
In terms of the top 10 CEOs with highest total compensation, Access Corporation’s Herbert Wigwe emerged first with N1.63 billion, followed by Seplat’s Brown with N610 million, Airtel’s Olusegun Ogunsanya – N590 million, Purchercos – N531 million and UAC’s Folasope Aiyesimoju at N497 million.
Others were Onyeagwu – N448 million, Richter – N409 million, El Dokani – N391 million, Toriola – N368 million and BUA’s Yusuf Haliru Binji – N368 million respectively.
However, the report, quoting Christine Mui, stated: “Amid decades-high inflation, workers’ wages are failing to keep pace with the rise in everyday expenses, but CEOs have not felt the same brunt.”
The report noted, “Interestingly, some firms recorded an increase in the CEOs’ remuneration supported by the growth in earnings, attributable to the resilience and adaptability of the business to shocks by the executives.
“The average size and the relationship of top executives’ compensation with the size of corporate turnovers and their profit before tax (PBT) changed in the year under review. On average, there was an increase in the pack packet of top executives of Nigerian firms, underscoring the resilience of firms to macroeconomic disruptions.
“Meanwhile, analysts faintly established changes in the compensation performance system were faintly established. Specifically, efforts were made to establish trends even though there was no exert basis for fixing the remuneration of executives, nor was there a direct empirical relationship between the executive pay and the financial performance of the firms.
“Pre-pandemic, there were increases in companies’ annual revenue and top CEOs’ yearly remuneration. But the pandemic ushered in many uncertainties and downturns. In the year under review, the companies and CEOs had to contend with fluctuation and macroeconomic uncertainty buoyed by the restrictions associated with the pandemic. It is not unreasonable to assume that many firms would have adjusted their pay systems from the top executives to the bottom staff to meet the current realities of the economy