Mumias Sugar Company #ticker:MSC raised its board pay by 31 percent even as it reported its worst performance in the year ended June 2018.
The Nairobi Securities Exchange-listed firm’s compensation of its board of directors has risen sharply in recent years and stands in stark contrast to the company’s deepening losses and wipeout of shareholder funds.
The directors earned Sh37.2 million in fees and allowances in the review period compared to Sh28.4 million the year before. The compensation stood at Sh12.4 million in June 2016, underlining the rapid pay growth.
The chairman, Kennedy Ngumbau, recorded one of the largest pay rises of 70 percent to Sh9.7 million from Sh5.7 million in 2017. This ranks him among the top six highest-earning chairmen of NSE-listed firms.
For comparison, Mr Ngumabu’s compensation is more than three times the Sh2.7 million fees that was paid to James Ndegwa, the chairman of NIC Group that reported a Sh4.2 billion net profit in the year ended December.
Mumias, meanwhile, ended the year to June 2018 with a Sh15.1 billion net loss and its net assets turned to negative Sh14.3 billion.
The miller says it did not raise the rates at which it pays its directors, meaning that the overall jump in their compensation was driven by a flurry of corporate activities such as meetings and travel which trigger the allowances.
“No decision made during the year ended June 30 2018 affected directors’ entitlements. Therefore there were no changes in the directors’ remuneration during the year,” the company said.
“Company directors are entitled to basic annual fees and sitting allowance for each board meeting and/or official company function attended.”
Other directors whose compensations rose in the review period are Joanne Tabuke whose earnings more than doubled to Sh5.2 million from Sh2.5 million.
Naomi Cidi’s pay rose from Sh3 million to Sh4.6 million while that of Peter Ingosi jumped from Sh1.2 million to Sh3.9 million. Mumias, which has had a high management turnover, did not disclose what it paid its managing director.
The company says it is betting on new capital injection by the government and renegotiation of its loans to maintain operations.