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Zimbabwe CEOs push back on salaries disclosure

by Staff reporter
22 Dec 2023 at 18:16hrs | Views
THE chief executives (CEOs) of firms trading their shares on Zimbabwe's two stock exchanges have slapped down proposed regulations that would force them to disclose their earnings in line with international best practices, regulators have revealed.

They turned down capital markets moves compelling them to disclose their salaries and perks fearing anexplosion of upheavals in the country's biggest corporations.

The Zimbabwe Stock Exchange (ZSE) and its foreign currency-indexed subsidiary, Victoria Falls Stock Exchange preside over a combined 67 counters whose CEOs were approached over the change, according to Anymore Taruvinga, who heads the Securities and Exchange Commission of Zimbabwe (SecZim).

Under a growing push to improve transparency, stock exchanges want heads of listed firms to disclose individual salaries and perks, instead of a combined manpower figure in financial statements.

"The stock exchange came up with proposals for CEOs of listed companies to publish their salaries, but said due to the (current environment), this would trigger pandemonium," the SecZim CEO said.

He was responding to questions from the Zimbabwe Independent during an interface between the capital markets regulator and financial journalists.

"They came up with a proposal to have their salaries published in financial statements," Taruvinga said, noting that some of the CEOs had raised security concerns.

Sandra Munyoro, an official at the ZSE confirmed that the CEOs had been approached and turned down stock exchanges' proposals, but she noted that consultations would be continuing.

Executive salaries and perks are closely guarded in Zimbabwe.

But in 2011, shocking disclosures by the Zimbabwe Congress of Trade Unions (ZCTU) claimed company executives were at the time earning an average US$8 000 per month, excluding ‘hefty perks' and other benefits.

The ZCTU said shop floor workers were earning US$200 per month at the time.

The stock exchanges' push was in line with an international campaign by investors and corporate governance experts to force CEOs and other executives to specifically disclose what they earn. Such disclosures are now a permanent feature in many countries where rankings of the wealthiest heads of corporations are being compiled.

Reports said in October, July Moyo, the Zimbabwean born CEO and executive director at Thungela Resources in South Africa, received a total compensation of R129,46 million (about US$7 million at the time) from the top thermal coal exporter in 2022. Moyo is one of South Africa's highest earning executives.

This week, leading economists and corporate governance experts were divided over the controversial issue.

Japhet Moyo, secretary general at the ZCTU, said Zimbabwe's CEOs do not want to disclose ‘obscene' pay and perks during a time when companies were performing badly.

"Maybe the companies are not doing well and therefore they are afraid that the salaries might be obscene and people may question why are they paying so much while the companies are not performing well," Moyo said.

"It is wrong to pay (themselves) and hide that information. They know that there will be an outcry. Transparency requires that if a company is listed, everything must be in public domain. There are people buying shares from these companies," he added.

"At the end of the year they might be told that there are no dividends when the money is going to administration. They are supposed to divulge their salary structures so that people are aware of how much is going to administration."

His views were also supported by Trust Chikohora, the former president at Zimbabwe National Chamber of Commerce.

He said stock exchanges can come up with rules compelling full disclosures of executive pay.

"It is best practice in good corporate governance to disclose top management remuneration," Trust Chikohora.

"It is the recommended best practice. If top management are getting remuneration which is commensurate to the performance of the company then there is no problem. It will be very clear that the remuneration they are getting is in line with the performance," he said.

"The problem comes when there is a mismatch between remuneration and the company's performance. The public must have a clear view of whether the top management is being responsible in terms of remuneration and the performance of the company.

"What the stock exchange must do if they are serious, is to just take it as a rule because the stock exchange has rules of disclosure. But, of course you start with consultations."

Prosper Chitambara, chief economist at the Labour and Economic Research Institute of Zimbabwe, said it was enough for publicly listed firms to make full executive pay disclosures to shareholders, not to the public.

"Shareholders would require seeing whether the directors are performing well or adding value to the organisation," he said.

"Disclosing to the public is a different ball game all together unless if it is a state enterprise or parastatal. But in line with corporate governance practices, disclosing such information help to promote transparency and accountability," he added.

Source - the independent
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