NAIROBI, Kenya – A recent wage gap report from Standard Investments Bank (SIB) reveals that CEOs of publicly traded companies in Kenya earn nearly 26.5 times what an average employee in the same company makes.
This growing disparity underscores the widening income inequality within Kenya’s private sector, as the gap between CEO and worker pay widened by 23.4% in 2023 compared to the previous year.
The report indicates that an average Kenyan employee would need to work for 26 years to earn what a CEO makes in a single year.
In 2022, the pay gap was slightly narrower, with CEOs earning 21.5 times more than their average employees.
This year, however, the median CEO-to-employee pay ratio increased from 21.49 to 26.52.
Among the 16 listed companies analyzed, the disparity between CEO and worker salaries in 2023 ranged from four times to a staggering 151 times.
Co-op Bank led with the widest pay gap, while BAT maintained the smallest income disparity for the third consecutive year.
In 2023, the median employee salary across these companies was Sh305,843 per year, translating to approximately Sh3.7 million per month.
Over the past five years, employee pay has grown at a compound annual growth rate of 8.6%, indicating a steady rise in compensation.
The report also highlighted a significant correlation between employee pay trends and return on equity (ROE), with a correlation coefficient of 0.55.
This suggests that shareholders are benefiting from investments in human capital.
Additionally, there is a near-perfect correlation (0.97) between changes in pay and inflation trends, indicating that employees are successfully maintaining their real wages as pay reviews are heavily influenced by annual changes in the Consumer Price Index (CPI).
Staff numbers for listed companies increased by 4.8% in 2023, a slower rate compared to the 5.6% growth recorded the previous year.
The annual median pay saw a modest increase of 3%, raising the average monthly gross pay to approximately Sh305,843.12.
Some companies, however, reported a decline in staff numbers, likely due to cost-cutting measures in response to a challenging operating environment.
The banking sector, in particular, showed resilience, with all banks except Standard Chartered reporting growth in staff numbers, averaging 5.7% compared to the non-banking sector’s average growth of 3.7%.
This expansion was likely driven by strong performance and branch expansion to capture more of the retail market.
This report, now in its third edition, analyzed data from 16 select Kenyan-listed firms across various sectors, including nine commercial banks, two FMCG players, one telco, an insurance firm, a cement manufacturer, an agricultural company, and a power generator.
These firms represent 91.3% of the Nairobi Securities Exchange by market capitalization and 97.2% of the second quarter of 2024 turnover.
This growing disparity underscores the widening income inequality within Kenya’s private sector, as the gap between CEO and worker pay widened by 23.4% in 2023 compared to the previous year.
The report indicates that an average Kenyan employee would need to work for 26 years to earn what a CEO makes in a single year.
In 2022, the pay gap was slightly narrower, with CEOs earning 21.5 times more than their average employees.
This year, however, the median CEO-to-employee pay ratio increased from 21.49 to 26.52.
Among the 16 listed companies analyzed, the disparity between CEO and worker salaries in 2023 ranged from four times to a staggering 151 times.
Co-op Bank led with the widest pay gap, while BAT maintained the smallest income disparity for the third consecutive year.
In 2023, the median employee salary across these companies was Sh305,843 per year, translating to approximately Sh3.7 million per month.
Over the past five years, employee pay has grown at a compound annual growth rate of 8.6%, indicating a steady rise in compensation.
The report also highlighted a significant correlation between employee pay trends and return on equity (ROE), with a correlation coefficient of 0.55.
This suggests that shareholders are benefiting from investments in human capital.
Additionally, there is a near-perfect correlation (0.97) between changes in pay and inflation trends, indicating that employees are successfully maintaining their real wages as pay reviews are heavily influenced by annual changes in the Consumer Price Index (CPI).
Staff numbers for listed companies increased by 4.8% in 2023, a slower rate compared to the 5.6% growth recorded the previous year.
The annual median pay saw a modest increase of 3%, raising the average monthly gross pay to approximately Sh305,843.12.
Some companies, however, reported a decline in staff numbers, likely due to cost-cutting measures in response to a challenging operating environment.
The banking sector, in particular, showed resilience, with all banks except Standard Chartered reporting growth in staff numbers, averaging 5.7% compared to the non-banking sector’s average growth of 3.7%.
This expansion was likely driven by strong performance and branch expansion to capture more of the retail market.
This report, now in its third edition, analyzed data from 16 select Kenyan-listed firms across various sectors, including nine commercial banks, two FMCG players, one telco, an insurance firm, a cement manufacturer, an agricultural company, and a power generator.
These firms represent 91.3% of the Nairobi Securities Exchange by market capitalization and 97.2% of the second quarter of 2024 turnover.
