Safaricom CEO Salary, Compensation Packages And Allowances for 2023

Explore the details of Safaricom CEO Peter Ndegwa's compensation package and the factors influencing his record-breaking earnings.

Aug 21, 2023 - 22:31
Aug 21, 2023 - 22:33
Safaricom CEO Salary, Compensation Packages And Allowances for 2023
Safaricom CEO Salary, Compensation Package And Allowances for 2023

Safaricom PLC, one of Kenya's leading telecommunications companies, has garnered significant attention due to its Chief Executive Officer's (CEO) compensation package for the year ending March 2023. Peter Ndegwa, Safaricom's CEO, received a substantial increase in remuneration, reflecting the company's efforts to retain top talent in a competitive market. This article delves into the details of Peter Ndegwa's compensation, the breakdown of his earnings, and the factors influencing this compensation package.

Key Takeaways

  1. In the fiscal year 2022/23, Peter Ndegwa, Safaricom's CEO, saw a remarkable increase in his total compensation, amounting to KSh 313.11 million, compared to KSh 288.93 million the previous year.
  2. Ndegwa's compensation package consists of diverse elements, including an annual salary, bonuses, and non-cash benefits. His remuneration reflects a delicate balance of these components contributing to his earnings.
  3.  Despite the surge in CEO compensation, Safaricom experienced challenges regarding its share price, which dropped significantly over the past 12 months, impacting the company's overall financial performance.
  4. To keep its executives motivated and aligned with corporate objectives, Safaricom has designed compensation packages encompass basic salaries and performance-based bonuses, shares, and non-monetary benefits.

CEO Compensation Breakdown

Peter Ndegwa, Safaricom's CEO since April 2020, received an annual gross pay of KSh 313.11 million for the fiscal year ending March 2023. This sum represents a holistic compensation package encompassing various components, including an annual salary, performance-based bonuses, and non-cash benefits. The company's approach to executive compensation is designed to motivate and incentivize top-tier leadership to drive growth and success.

Ndegwa's compensation package is divided into distinct elements:

  1. Annual Salary: The CEO's annual salary of KSh 95.24 million forms the foundational component of his compensation. This base pay acknowledges his role and responsibilities in leading the telecommunications giant.

  2. Performance-Based Bonuses: Beyond the basic salary, Ndegwa earned bonuses of KSh 196.27 million. This performance-based approach rewards him for achieving key milestones and driving the company's success.

  3. Non-Cash Benefits: Besides salary and bonuses, the CEO received non-cash benefits valued at KSh 21.6 million. These benefits may include housing, club memberships, and other perks that enhance his overall compensation package.

Company Performance and Share Price Challenges

While the CEO's compensation package reflects his contributions to the company, Safaricom's share price witnessed a significant decline. Over the past 12 months, the company's share price dropped to KSh 19.55 per share in July 2023, compared to KSh 28.2 in the same period the previous year. This decline might be attributed to various market and industry factors influencing investor sentiment and impacting the company's financial performance.

Safaricom's Compensation Philosophy

Safaricom's approach to executive compensation is geared toward retaining and attracting top talent in a competitive market. The compensation policy ensures that the CEO and executive directors are incentivized to drive the company's growth and profitability. In addition to base salaries, performance-based bonuses, and non-cash benefits play a significant role in motivating and rewarding exceptional performance.

The company also extends its compensation philosophy to non-executive directors, offering competitive fees to retain experienced board members. Safaricom's strategy revolves around being at the forefront of market remuneration, promoting a healthy balance between the interests of executives and shareholders.

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Peter Ndegwa's compensation package as Safaricom's CEO for the fiscal year 2022/23 has shed light on the company's approach to rewarding and retaining top talent. Despite the challenges posed by the company's declining share price, Safaricom continues to prioritize its executives' performance and contributions through a carefully designed compensation structure. This compensation strategy underlines the company's commitment to excellence and aligns its leadership team's interests with its shareholders' and stakeholders' expectations.

Frequently Asked Questions

Who is Safaricom's CEO? 

Safaricom's CEO is Peter Ndegwa, who assumed the role in April 2020. He is the first Kenyan to serve in this position.

How much did Peter Ndegwa earn in the fiscal year ending March 2023?

 In the fiscal year ending March 2023, Peter Ndegwa received a compensation package of KSh 313.11 million.

What constitutes Peter Ndegwa's compensation package?

Ndegwa's compensation package includes an annual salary, performance-based bonuses, and non-cash benefits, amounting to KSh 95.24 million, KSh 196.27 million, and KSh 21.6 million, respectively.

How does Safaricom ensure competitiveness in executive compensation?

Safaricom's compensation philosophy focuses on offering competitive packages that include performance-based bonuses, shares, accommodations, and club memberships to attract and retain top talent.

What challenges has Safaricom been facing in recent years?

Safaricom has been striving to diversify its income streams due to the maturing voice business. However, this pursuit has brought challenges, including capital-intensive investments and a competitive business environment.

What is the company's approach to compensating non-executive directors?

Safaricom offers competitive fees to its non-executive directors to ensure experienced board members are retained without offering long-term incentives like performance share plans.

Disclaimer: This article provides insights into Safaricom CEO Peter Ndegwa's compensation package and the company's performance. It aims to offer a balanced perspective on the compensation structure and its impact on motivating executives. The information presented is based on available data and sources, and readers are advised to verify details independently before making any financial decisions.

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Joseph Richard Joseph is a graduate of Mathematics and Computer Science (Applied Option). With expertise in Technology and Finance, he brings his knowledge to the field, demonstrating an authoritative understanding of these interrelated areas. Joseph is pursuing a Master's in Software Engineering, further expanding his skill set.