Kenya: East African Breweries Limited top executives see bonuses rise due to higher sales and profit

Rising beer sales and profit have delivered triple-digit growth in the bonuses of East African Breweries Limited (EABL) top executives, the Business Daily reported on September 9.

This saw the brewer’s managing director’s annual pay grow by more than a fifth to cross the Sh100 million mark in the year to June.

Bonuses paid to CEO Andrew Cowan, Jane Karuku (managing director of Kenya Breweries Limited) and Gyorgy Geiszl (the finance director) recorded triple-digit growth on the back of a 59 percent growth in profits to Sh11.5 billion, the EABL annual report shows.

This lifted Mr Cowan’s pay to Sh115.7 million or Sh9.6 million per month in the period to June, reflecting a 21.7 percent increase.

The strong profit performance was attributed to the 11 percent growth in volumes and a 12 percent surge in sales to Sh82.53 billion, marking the first time the brewer had grown profits since 2016.

Mr Cowan earned a salary of Sh35.8 million in that period, representing an increase of 2.43 per cent from a year earlier with his bonus having grown 145.3 percent to Sh24.5 million.

In the period to June, Mr Cowan also took home Sh55.3 million in perks, up 10.55 percent from Sh50 million a year earlier while Ms Karuku saw her pay grow 19.58 percent to Sh46.4 million or Sh3.8 million monthly compared to the previous year.

Her compensation increased largely on account of a 110.6 percent jump in bonus to Sh10.6 million from Sh5 million a year earlier.

Mr Geiszl’s pay rose 22.11 percent to Sh68 million in the period from Sh55.7 million a year earlier on back of the reward scheme.

The brewer linked its remuneration policy to the performance of the company and individual employee contribution.

"Bonus pay is discretionary and is paid out in line with the company’s bonus scheme, which seeks to reward an employee’s contribution as part of a ‘winning team’," said the company.

EABL’s performance was underpinned by the recovery in the consumption of both beer and spirits across the region.

According to the firm’s audited financial statements, all regional markets registered increased sales, pushing up the firm’s total revenues by 12 percent to Sh82.54 billion from Sh73.45 billion.

Revenues in Uganda and Tanzania grew by eight percent and 20 percent respectively while Kenya went up 13 percent.

Ugandan and Tanzanian subsidiaries contributed 15 percent and 12 percent respectively to EABL’s profits with Kenya accounting for 73 percent of the earnings. In Kenya, EABL sells the low-end lager Senator Keg brand and spirits and these attracted double-digit growth.

EABL is counting on frothing demand for the low-priced Senator Keg beer and also scotch whisky to counter the impact of tax increases.

Sales of Senator Keg, a low-priced lager made from locally-grown sorghum, rose by close to a third in the last financial year, which will help to offset the impact of higher taxes from September.

Mr Cowan said growing demand for Scotch whisky brands like Johnny Walker and Singleton could also counter the potential headwinds that taxes pose to the business.

10 September, 2019