{"id":371083,"date":"2020-10-12T16:04:44","date_gmt":"2020-10-12T14:04:44","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=371083"},"modified":"2020-10-12T16:05:40","modified_gmt":"2020-10-12T14:05:40","slug":"firstrand-starts-incentive-program-to-retain-top-managers","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/banking\/371083-firstrand-starts-incentive-program-to-retain-top-managers.html","title":{"rendered":"FirstRand starts incentive program to retain top managers"},"content":{"rendered":"

FirstRand Ltd. started a new incentive program to retain top managers after the economic fallout of the coronavirus pandemic hit earnings and sank share-based rewards.<\/p>\n

The ripple-effect of the Covid-19 outbreak could cause managers to lose out on their share awards for years, possibly resulting in \u201ctalent leakage,\u201d Chairman Roger Jardine said in the Johannesburg-based lender\u2019s annual report.<\/p>\n

South Africa\u2019s largest bank by market value started the program last month, according to the annual report. The incentives don\u2019t come with any performance conditions, and will lock in participants for the next three years, FirstRand said.<\/p>\n

Senior managers weren\u2019t granted salary increases and cash bonuses for the financial year through June in line with guidance from South Africa\u2019s central bank for lenders to conserve cash due to the uncertainty surrounding the virus.<\/p>\n

FirstRand\u2019s short-term incentive pool fell 43%, and rewards for executive directors and prescribed officers dropped 48%, the report said. Non-executive directors\u2019 fees won\u2019t increase in 2021. Should incentives granted in 2018 and 2019 vest, the employee will be paid the higher sum of the two programs.<\/p>\n

As South Africa entered a lockdown to manage the spread of the coronavirus and most businesses were forced to close, FirstRand\u2019s executive directors and prescribed officers waived 30% of their salaries for three months and donated the money to a support fund.<\/p>\n

\u201cManagement should be recognized for navigating a severe operational challenge,\u201d Jardine said.<\/p>\n

Africa\u2019s most-industrialized nation was trapped in its longest downward cycle since World War II even before the coronavirus struck. Lenders responded to the outbreak by restructuring loans for companies and consumers struggling to meet their obligations, and payment holidays.<\/p>\n

\u201cThis pandemic clearly illustrated why public-private partnerships must be at the core of South Africa\u2019s national policy responses,\u201d Jardine said. \u201cThe private sector was not sitting on the sidelines during this pandemic, it was actively engaged in assisting government with its health care and social responses.\u201d<\/p>\n

Fossil Fuels<\/h3>\n

FirstRand, which owns an investment bank, consumer lender, and South Africa\u2019s biggest vehicle-financier, is also reviewing its business models to include a greater focus on climate change, the company said.<\/p>\n

While the firm is in the process of improving disclosure related to fossil-fuel lending, its main loan-exposures are as follows:<\/p>\n