Maria Ramos, the chief executive officer of Barclays Plc-controlled Absa Group Ltd. who gave up her cash bonus for 2012, may be entitled to about 19 million rand ($2.1 million) of other payouts by the end of March.
Deferred share incentive awards announced over the past three years may total about 11 million rand when they vest at the end of this month and dividends are accrued, according to Bloomberg calculations using Johannesburg-based Absa’s average February stock price of 166 rand. Ramos may also be paid 8 million rand of cash and shares in March as part of a 2010 program to retain senior managers.
The performance conditions for the deferred incentives have been met, a spokesman for Absa who asked not to be named in line with company policy said in an e-mailed response to questions on Feb. 19. The retention awards are subject to approval by the bank’s compensation committee, which is due to meet on March 14, the spokesman said.
Ramos, 53, announced she was forsaking her cash bonus after she described Absa’s 2012 earnings as “disappointing” on Feb. 12. While the bank missed its own targets as home loans soured and full-year profit declined 13 percent to 8.39 billion rand, part of Ramos’s remit as CEO is to implement the longer-term strategy of integrating retail and business banking and combining the bank’s African operations with those of Barclays.
“There has been a massive shift with boards looking at longer-term, more sustainable returns,” said John Brodie, managing director of Mindcor Group, a Johannesburg-based executive recruitment and consulting company. “Financial-services firms have gotten into trouble in the past when they have rewarded short-term growth.”
Ramos was paid 20.7 million rand for 2011, including deferred awards of 14 million rand. Standard Bank Group Ltd.’s Jacko Maree, CEO of Africa’s largest bank, received total pay of 27.2 million rand for that period, while FirstRand Ltd. CEO Sizwe Nxasana was paid 22.5 million rand for the 12 months through June.
Ramos, who joined Absa in 2009, last got a cash bonus in 2010, when she was paid 2.28 million rand as part of her 19.6 million-rand compensation.
Ramos won’t be taking any annual performance incentive either in cash or a deferred award in 2013 as a consequence of the 2012 financial results, the Absa spokesman said. Her total compensation for 2012, including salary, bonus and long-term incentive, will show a “substantial decline” on 2011, he said.
Investors want to see pay match performance, Adrian Cloete, an Absa shareholder and equity analyst at Cadiz Asset Management, said in a phone interview. “That’s a core principle,” he said.
Absa closed 0.1 percent higher at 162.15 rand in Johannesburg, giving the stock a gain of 8 percent over the past 12 months. Standard Bank has advanced 8.2 percent over that period, while FirstRand climbed 34 percent, making it the best performer among South Africa’s big four banks.