How directors of eight banks took N1.383bn investors’ funds as emoluments – Investigation

. Shareholders kick as experts blame liquidity stress on high perks

A curious twist in the annual reports of some commercial banks have shown that eight top banks jerked up the emoluments of their directors, chairmen and CEOs to the tune of N1.383, 882 billion in the 2020 financial year alone.

This was inspite of speculations that many of the banks are still battling with liquidity stress, in a year that businesses were faced with insalubrious operating environment occasioned by COVID-19, which knocked life out of many firms, while others walked a tight rope to survive.

A breakdown of the bank’s financial statements for 2020 showed that the total amount of money paid to about 89 directors increased by about 43.94 per cent, up from N1.335, 042billion in 2019 to N1.383, 882billion last year.

The eight banks include GTBank Plc, Zenith Bank Plc, Stanbic IBTC, United Bank for Africa Plc, FBN Holdings Plc, Access Bank Plc, Fidelity Bank Plc and FCMB Plc.          

Although the managements of the banks said the salaries and wages paid to their chairmen and directors complied with the provisions of the code of corporate governance issued by regulators and accepted by shareholders, the investors kicked against what they described as unnecessary huge remuneration.

The investors reacted at their various Annual General Meetings last month, alleging that aside from high remuneration and other allowances being drawn by the bank directors, there were several other payments to their domestic staff, which were not captured in the books.


GTBank led other banks, maintaining N399.697million emoluments paid to its directors in 2019. Zenith Bank followed with N230million paid to directors in 2020, against the N221million they received in the review period of 2019.

Stanbic IBTC paid N158million emoluments to its directors in the 2020 financial year from the N155million, which the directors received in 2019.  Others are United Bank for Africa, which paid directors N143million in the 2020 financial year, maintaining the same amount it paid last year. FBN Holdings paid N122million in 2020 against N120million which they received in 2019.

Access Bank paid N120million emoluments to directors against the N85, 160million, which the directors received in 2019. Fidelity Bank paid N110million emoluments to its directors in 2020 financial year, maintaining what it paid in 2019.  FCMB paid N101million to directors in 2020 from N101, 185million which the directors received in 2019. 


A further analysis of the amount paid to chairmen of the eight banks showed that the figures increased by 7.99 per cent from N229, 208million in 2019 to N280, 360million in 2020.

The Chairman of Access Bank Plc received the highest pay in 2020, with N65.630million, representing 25.71percent increase from the N52.208million he was said to have earned in 2019.

FBN Holdings followed with second highest—N64million in 2020, which was also the amount earned in 2019. The Chairman of Stanbic IBTC received N49million emolument in 2020, against the N44million, which he earned in 2019. Union Bank paid its chairman N30million both in the 2020 and 2019 financial year.

Others are Zenith Bank Plc, which paid its chairman N28million in the 2020 financial year, away from N13million which the directors received in 2019. FCMB paid N13million remuneration to directors in 2020, repeating same amount it paid in 2019. The chairman of United Bank for Africa received the lowest emolument of N3million both in 2020 and 2019 financial year.

However, FirstNews investigation further revealed that despite the Central Bank of Nigeria’s restrictions on bank’s dividend payout, some banks’ directors collected huge amount of dividends, up-shoot in their dividend income, as against what was stipulated by the regulators.

In doing this, the apex bank said it intended to discourage high dividend payout by banks, on the heels of worsening non-performing loans, which were eroding banks’ capital adequacy. The policy would then force the banks to plough back their profits to beef up their capital base.


A financial analyst, Mr. Adewale Johnson, said the amount of salaries and wages paid to bank directors and chairmen was still on the increase despite repeated clamour by investors at every AGM that the package should be reviewed.

A former bank manager, Mr. Udechukwu Uzoka, who was affected by Covid-19-induced retrenchment, said many of the banks had streamlined workforce and converted some of their staff to casual workers.

He said, “But ironically, while the hierarchy of the banks are cutting down on staff salary and even replacing experienced graduate members of staff with inexperienced, much younger holders of Ordinary National Diploma – all in a bid to reduce the overhead, the directors’ and chairmen’s emoluments has remained untouched.

“In asking some of the old hands to go, the management often blamed the action on the harsh economic environment, saying that the junior staff with enough stamina could do the job of the senior ones, even better. As a result, most senior staff members across the banking industry now go to work in fear.”


Meanwhile, the issue has polarised the ranks of the banks’ shareholders, findings have shown. For instance, the National Chairman, Progressive Shareholders Association, Mr. Boniface Okezie, said both the apex regulator and the management of the banks had to find a way to curtail high remuneration of directors in the banking industry, adding that despite the high remuneration every financial year, insiders’ dealing persisted.

“If you go to some banks’ Managing Directors’ respective homes, you will see the fleet of cars as if they are into car business. Their flamboyant lifestyle is worrisome. I am not comfortable with it. Some of them take insider loans that are not performing and the shareholders bear the burden. Paying high salaries and allowances is not the solution to insider dealings,” he stressed.

Chairman, Proactive Shareholders Association of Nigeria, Mr. Taiwo Oderinde, said, “Directors of companies are trustees that we have given the mandate to take decisions on behalf of the company. This means that shareholders have given their approval. One of the reasons we have allowed them to take good remuneration is for them not to steal our money.”

According to Oderinde, the packages for executive directors are not too much, given the volume of work they do and the income they make for the institutions.

“My position on this issue is that it should be looked at with respect to the contribution they bring to the organisation,” he said.

A professor of Financial Economics, Leo Ukpong, said, “Considering the economic condition of Nigeria, every organisation should cut down on excess packages to reflect the present economic realities. The executive directors should not be excluded from this belt-tightening.

“The banks’ Executives’ compensations are really on the high side when you compare it to other countries’. The executive directors of banks are given all kinds of allowances at the expense of depositors and shareholders. We do react on this issue when we attend Annual General Meetings. In some cases, we refused to approve their remuneration and asked them to go back and review it downwards.”

An economist and Managing Director, TrustFund Company, Mr. Chukwuma Nnadi, said before one could be a bank director; “he is already a rich man.”

“The CBN and the Securities and Exchange Commission already have a code of corporate governance for that issue. They are the regulators; so if there are abnormalities that the investors are pointing out over the years, they should know,” he added.

He also noted that the concern should not be on how big the salaries were, but on equity remuneration of the employees.

“What is the disparity between the Chief Executive Officer and other senior management staff members? If the difference is too high, then it is not good for the organisation. Banks should be careful in fixing remuneration so that it does not affect what they are giving to shareholders in form of returns on investment,” he said.

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