Capitec CEO Gerrie Fourie’s total remuneration for the 2024 financial year rose to R65m, cementing his place as one of the industry’s top paid bosses.
Fourie’s pay was largely made up of a long-term incentive (LTI) of R42m. The surge in Capitec’s share price over the years and growth in profit flowing from its diversification strategy helped contribute to the figure.
The company said in its annual report published on Tuesday that the LTI figure took into consideration both the delivery on the underlying return on equity (ROE) and headline earnings per share performance measures.
The company, which has grown its client base to a third of SA’s population, also said the LTI figure recognised the “significant growth in Capitec’s share price” from date of award up to the end of the 2024 financial year.
The group’s headline earnings grew 16% from R9.2bn to R10.6bn, with a ROE of 26%.
Remuneration committee chair Vusi Mahlangu said the lender’s leadership team “successfully executed strategic priorities for the year and is to be commended” along with employees for making strides in making Capitec the preferred retail and business bank in SA.
He added that one of the first matters he had to attend to upon his appointment as chair of the committee was to review the group’s reward structure, to ensure that it represents a market-leading approach, which addresses the key challenges that Capitec faces with respect to the remuneration of key employees.
“As our business continues to mature, we believed that it was vital to consider whether the current instruments remain fit for purpose in driving the right behaviour and incentivising for sustainable growth which we aim to deliver as part of our strategy,” Mahlangu said in the report.
“During this review, we carefully considered whether the use of full share instruments at an executive level would be appropriate, but ultimately decided that the committee was comfortable that the current instrument mix at this level has resulted in behaviour which is aligned with our culture and execution of strategy, and outcomes which were suitable in terms of our overarching commitment to ‘pay for performance’”.
Following the review, the committee tweaked the incentive offering in response to feedback from shareholders, including making the ROE target more stretching, introducing a three-tiered LTI vesting scale and including client satisfaction as a third LTI measure.
Mahlangu said executive remuneration was benchmarked externally at least every two years against a comparator group of JSE-listed companies similar in size in terms of market capitalisation and/or industry to ensure that remuneration is fair and in line with the market.
“In addition, Capitec looks at the remuneration for the four traditional SA banks as the company’s closest competitors,” he said.
“The key management LTIs are aimed at driving company performance and share price growth over the long term, with the LTI outcomes being directly linked to the growth in Capitec’s share price, and employees only receiving the growth in share price above the strike price.”
Capitec’s share price is up 44% in the past five years.
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