FirstRand's Sizwe Nxasana Becomes South Africa's Highest-Paid Banking CEO

Sizwe Nxasana became South Africa’s best-paid bank chief executive officer after FirstRand Ltd. boosted his remuneration to 45 million rand ($6.4 million).

Nxasana, 53, was paid a salary of 5.1 million rand, a 5.82 million-rand performance bonus and deferred shares valued at 5.18 million rand in the year through June, the Johannesburg- based bank said in its annual report. Nxasana also got 1.24 million share awards, currently valued at 27.5 million rand, which pay out in September 2012 if he meets performance targets.

Nxasana, who succeeded Paul Harris in January, received more than double the 2009 remuneration of South Africa’s second- highest paid bank CEO, Standard Bank Group Ltd.’s Jacko Maree. FirstRand increased full-year profit 35 percent and gained 28 percent in Johannesburg trading over the 12 months through June, making it the best performer among the country’s big four banks.

“We have always tried to align employee reward with shareholder returns,” FirstRand Chairman Laurie Dippenaar said in the annual report published Nov. 16.

The pay of executives, especially those at banks, is under scrutiny and increases shouldn’t be “exorbitant,” South African Reserve Bank Governor Gill Marcus said today in a televised press conference from the capital, Pretoria.

FirstRand fell 2.8 percent to 21.57 rand, the most in more than three months and the biggest drop among the 42 biggest companies trading in Johannesburg. That pared this year’s gains to 18 percent and cut its market value to 121.6 billion rand.

Owner-Managed

More than 40 percent of Nxasana’s performance payments in 2010 are deferred for two years, FirstRand said. He was paid 9.9 million rand in the previous fiscal year and also received 2 million share appreciation rights.

The company that became FirstRand was founded by Harris, Dippenaar and G.T. Ferreira in 1977. Dippenaar owns almost 3.5 percent of the company, a stake valued at about 4.3 billion rand.

“FirstRand is transitioning from an owner-managed culture to a professionally managed business,” said Patrice Rassou, a banking portfolio manager who helps oversee the equivalent of $41 billion at Cape Town-based Sanlam Investment Management. “To maintain its entrepreneurial culture, it needs to have guys like Sizwe think like owners.”

Nxasana became the first black CEO of one of the country’s big four banks after heading Telkom South Africa Ltd., Africa’s largest fixed-line phone company, until 2005. He established South Africa’s first black-owned audit practice in 1989.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Edward Evans at eevans3@bloomberg.net

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