Standard Bank's executives pay the price but new entrants get big packages
Spare a thought for Jacko Maree.
The embattled CEO of Standard Bank has had to deal with falling earnings, missed targets and a furious backlash over the bank's surprise decision to cut around 2,000 jobs in London and Johannesburg last year.
As if that were not enough, he now finds himself the worst-paid chief executive among South Africa's big five banks, despite Standard being the biggest by assets, profits and market cap.
Mr Maree took home a salary of R6.5m last year, including pension contributions, but he forfeited a bonus for the second year in a row, following the banks's disappointing performance . His pay cheque was half of the packages, including bonuses, that his counterparts Absa Ceo Maria Ramos, Nedbank Ceo Mike Brown and Sizwe Nxasana of FirstRand received, and a fifth of Investec's Stephen Koseff.
"Standard Bank is still recovering from the retrenchments last year the one-off cost of which reportedly was R781m, and they have recently hired independent consultants to review and benchmark performance," says Alison Thom, senior consultant at Anton Apps International Recruitment Specialists Johannesburg. "Standard Bank is paying less than other banks, and there are feelings out there that the senior executives are paying a personal price for below target real earnings."
The bank's Remuneration Committee was unapologetic. Maree's lack of awards is "appropriate in the circumstances", as last year's retrenchment of permanent staff "brought hardship to those people and their families." There has to be a "strong differentiation in pay between excellent delivery and modest performance and between high integrity and loose compliance," says Ted Woods, the Committee's chairman.
But if Standard Bank takes away with one hand, it gives with the other. Competition for talent is such that South Africa's biggest bank knows it has to offer competitive packages to retain key employees and even bigger incentives to poach people from other banks.
Just look at SBG Securities, the group's stockbroking arm. It was created last year after the end of the joint brokerage business with Credit Suisse and has since made several high-profile hires.
Now it has managed to poach Voyt Krzychylkiewicz from Deutsche Bank to be its banking analyst and head of all financial research in sub-Saharan Africa. Nicole Penny is also joining from Deutsche Bank as a specialist finance analyst, while Risto Ketola has been hired to cover the insurance industry.
