FirstRand has established a bonus offering to retain talent.
FirstRand Ltd has started a new incentive programme to retain top managers on the heels of the economic fallout of the coronavirus crisis, which has reduced earnings and hit share-based rewards.
Moneyweb reports that FirstRand Chairman Roger Jardine said the Covid-19 outbreak could reduce managers' share awards for years, leading to a possible “talent leakage”.
FirstRand, which owns FNB, RMB and Wesbank, reported a 38% drop in normalised profit for the year in September. FirstRand’s short-term incentive pool fell 43%, and rewards for executive directors and prescribed officers dropped 48%, according to the lender’s annual report. In circumstances where incentives granted in 2018 and 2019 vest, the employee will receive the higher payment of the two programmes, while non-executive directors’ fees will not increase in 2021.
The programme, which started in September, follows on a series of difficult months precipitated by the Covid-19 lockdown. The crisis forced mass business closures and in response, FirstRand’s executive directors and prescribed officers waived 30% of their salaries for three months and donated the money to a support fund. Senior managers had to forgo salary increases and cash bonuses for the financial year through June, following advice issued by the central bank for lenders to conserve cash due to the uncertainty surrounding the virus.
“Management should be recognised for navigating a severe operational challenge,” Jardine said.