Co-operative Bank of Kenya chief executive Gideon Muriuki.
Co-operative Bank of Kenya chief executive Gideon Muriuki earned Sh455.5 million last year, cementing his position as corporate Kenya's top paid boss with a daily average earning of Sh1.25 million.
The bank’s top shareholder — Co-op Holdings Co-operative Society Limited—disclosed that Mr Muriuki earned a salary of Sh154.39 million and bonus pay of Sh301.14 million. This is equivalent to a monthly pay of Sh37.9 million, which is 209 times the Sh181,618 average pay that workers in Kenya’s financial sector took home in 2022.
The disclosure indicates that Mr Muriuki earned Sh428.2 million in salary and bonuses in 2022, meaning he got a Sh27.2 million pay rise, on the back of the lender’s 5.2 percent rise in net profit to Sh23.2 billion.
The bank has previously stated that the pay reflects Mr Muriuki’s long service to the lender and his efforts in turning around the bank from a loss-making operation to one of the largest and most profitable financial institutions. Co-op Bank runs a performance-based bonus reward system applicable to all staff.
The firm has credited Mr Muriuki and his board for instilling a “performance-driven culture” at the bank under the Soaring Eagle project that saw it emerge from a huge loss of Sh2.3 billion and an asset base of Sh22.3 billion in the year 2000 to the current net earnings of Sh23.2 billion and an asset base of Sh671 billion.
“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 the lender.
Mr Muriuki joined Co-op Bank in 1996 as a senior corporate manager and rose to the position of director for corporate and institutional banking in 199, before he was appointed Managing Director in 2001. He has over 35 years’ experience in banking and finance.
The bank is now Kenya’s third most profitable lender after Equity Group (Sh41.98 billion) and KCB Group (Sh37.46 billion). It was followed by NCBA with a net profit of Sh21.4 billion.
The banking sector has been the country’s most profitable sector and rebounded swiftly from Covid-19 economic hardships. The performance has seen banks reward shareholders with outsized dividends as workers enjoyed annual pay increases and bonuses in an economic setting that has seen other sectors retrench and freeze salary increases.
CEOs of the banking sector have topped the chart of highly paid executives in the country.
The Co-op Bank board last month maintained its dividend at Sh1.50 per or Sh8.8 billion. Co-op Holdings Co-operative Society Limited will receive Sh5.68 billion for its 64.56 percent stake while Mr Muriuki, the top individual shareholder, will receive Sh176 million. He has a two percent stake in the bank valued at Sh1.64 billion.
Co-op Holdings disclosures show that the bank’s compensation to other key management personnel including senior managers and non-executive directors hit Sh2.06 billion from Sh1.73 billion.
Non-executive directors’ emoluments, including fees, rose to Sh264.49 million from Sh235.73 million as payment to the bank’s senior managers, excluding the CEO, increased to Sh1.89 billion from Sh1.58 billion.
Co-op’s non-executive directors receive a monthly retainer and a sitting allowance for every board meeting attended. They are also entitled to an annual honorarium based on the bank’s performance.
The bank’s staff costs for last year increased to Sh16.69 billion from Sh14.78 billion on salary increase as well as the hiring of 536 new employees.
The expanded workforce came in the period Co-op increased its branch network by eight to hit 194. The lender is planning to close 2024 with an additional 15 branches.
The 15 branches will add to the eight opened last year and five in 2022. Co-op closed September last year with 193 branches. The opening of new branches mirrors the trend being witnessed in the sector where Co-op competitors including KCB, NCBA, DTB and I&M Bank have all been adding physical outlets.
