Yearly remuneration of each CEO amounted to Rs59.6 million on average in 2015. PHOTO: STOCK IMAGE
KARACHI: Bank CEOs earn on average 367 times more than what a typical Pakistani makes in a year.
Based on data compiled by KPMG Taseer Hadi & Company and calculations by The Express Tribune, the combined remuneration of the CEOs of 27 commercial banks operating in Pakistan amounted to Rs1.6 billion last year. This means each of the 27 bank CEOs earned on average Rs59.6 million in 2015.
The Big Five and their top executives' total salary
The per-capita income in Pakistan averaged just Rs162,568 in 2015-16. This shows the ratio of the average bank CEO remuneration and the per-capita income in Pakistan hovers around 367-to-1.
Similarly, bank CEOs earned on average 56 times more than what their average colleagues took home in 2015, official data shows.
Total staff costs – including salaries, allowances and retirement benefits – that the 27 banks incurred on their combined workforce comprising 153,886 staff members in 2015 amounted to Rs163.5 billion. It translates into a CEO-to-staff remuneration ratio of 56-to-1 in 2015 as opposed to 58-to-1 recorded in 2014.
Banking data reveals huge variance in the CEO-to-staff remuneration ratio among 27 commercial banks. For example, the widest gap between the remuneration of the bank CEO and that of an average staff member existed in Silkbank (106.5) and United Bank (104.8). Bank Alfalah (96), Soneri Bank (94.1) and MCB Bank (92.9) also had high CEO-to-staff remuneration ratios.
UBL spent over Rs24 crore on CEOs in 2014
Industrial and Commercial Bank of China (6.9), Deutsche Bank (9.8) and the Bank of Tokyo (9.9), which are some of the smallest banks operating in Pakistan, had the lowest CEO-to-staff remuneration ratios last year.
National Bank of Pakistan employs the largest number of bankers in Pakistan. With 25,425 staff members, its workforce accounts for 16.5% of the people employed in the country’s banking sector. Its CEO-to-staff remuneration ratio was 60.5 last year, up from 41.6 recorded in 2014.
Habib Bank was ahead of its rivals within large and medium-size banks in terms of the cost per staff. It clocked up at Rs1.6 million per staff member in 2015 for HBL as opposed to Rs1.5 million for Standard Chartered and Rs1.2 million for United Bank.
Do bank CEOs deserve huge salaries?
Top-earning bank CEOs last year were of United Bank (Rs127.3 million), Bank Alfalah (Rs97.1 million), Silkbank (Rs86.1 million), MCB Bank (Rs84.7 million) and Habib Bank (Rs75.1 million).
Banks whose CEOs received a relatively lower remuneration in 2015 include Bank of Tokyo (Rs16.1 million), Bank of Khyber (Rs21.5 million), JS Bank (Rs24.9 million), First Women Bank (Rs28 million) and Summit Bank (Rs32.4 million).
The annual remuneration of the CEO of Bank of Khyber was the second-lowest last year in spite of a 194.7% annual raise. Other banks whose CEOs received a fat year-on-year raise in 2015 include Askari Bank (68.4%), National Bank of Pakistan (50.8%), Habib Bank (41.3%) and Standard Chartered (35.8%).
The writer is a staff correspondent
Published in The Express Tribune, May 30th, 2016.
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