How the survey was done

For the first time, The EastAfrican is publishing its annual survey of CEO and key senior management compensation among firms listed on the Nairobi Stock Exchange.

The survey will expand in scope to cover banking and insurance companies in the East African Community.
This year’s study includes companies in Kenya currently ranked among the top 30 in market capitalisation, with 2009 as the base year.

This report, which draws all its data from annual reports that are publicly disclosed by listed firms, is not a ranking of any sort. It attempts to give the busy and non-specialist reader a snapshot of executive pay as disclosed in annual reports.

It does not attempt to ascertain what each executive got, unless it is very clear in the disclosures. So, in many cases, it takes the total pay to executive directors as given.

The Companies Act clearly defines executive directors as those corporate officers in management who also serve on the board of directors and who are distinct from outside non-executive directors with no managerial role.

Key management are top officers of a company who play an executive role and may or many not be serving on the board.

Though the law clearly defines what is pay and how it should be disclosed, we do not attempt to classify it.

Some companies break out pay classification, others lump everything together. The revenue, net profits and dividend figures are obtained from annual reports. Market capitalisation is obtained from NSE data.

The percentage change is the compounded annual growth rate over five years. The holding period return is the geometric mean of the beginning, ending and cumulative dividend paid out over five years.

There are many complexities when it comes to tracking executive pay in Kenya because most firms do not break out individual pay. This is because the law does not require them to do so.