MTN Group CEO’s strange salary structure explained
MTN has explained that some of its executives receive a portion of their pay from a Dubai-based entity in US dollars if they have significant responsibilities outside their primary country.
Asked why these amounts are paid out of Dubai, a spokesperson told MyBroadband that this was because it was the easiest option for the MTN Board.
Several MTN executives receive their salaries according to a split remuneration scheme.
This includes group chief executive Ralph Mupita, financial officer Tsholofelo Molefe, and chief operating officer Jens Schulte-Bockum.
Two more executives started receiving some of their pay in dollars in the 2023 financial year — MTN Nigeria CEO Karl Toriola, and senior VP for markets Ebenezer Asante.
The larger portion of their salaries is usually paid in local currency by a domestic legal entity, with the remainder paid in dollars by an entity in Dubai.
MTN’s integrated report for its 2023 financial year states that this is due to the pan-African nature of its business and the importance of having a competitive remuneration structure at senior levels.
“Select prescribed officers who have significant responsibilities outside their primary country of employment or whose income and expenses are incurred in multiple currencies” receive these dual employment contracts, MTN said.
“Our peer comparator analysis conducted in [the 2022 financial year] indicated that this remuneration principle is common among a number of companies with diverse geographic footprints.”
The dual contracts are subject to board approval.
MTN’s integrated annual report showed that Group CEO Ralph Mupita’s package included earnings of $913,000 in 2023.
Converted to rand using the exchange rates stipulated in the report, this comes to R16.637 million.
This is more than a fifth (20.7%) of his R80.4-million single-figure remuneration for 2023, including dividends and vested performance share plan shares.
An MTN spokesperson explained that this represents the proportion of Mupita’s responsibilities outside South Africa.
MTN’s presence in Dubai traces back to its 2006 acquisition of Investcom in a $5.5 billion deal (around R38.5 billion at the time).
Although headquartered in Beirut, Lebanon, Investcom was listed on the Dubai and London stock exchanges.
Through the acquisition, MTN gained operations in Ghana, Syria, Yemen, Sudan, Cyprus, Benin, Guinea Bissau, Guinea, Liberia, and Afghanistan.
It has since exited Yemen and sold the Cyprus business.
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