BoG directs banks to publish salaries of top personnel

Governor of the Bank of Ghana, Dr Ernest Addison

The Bank of Ghana has indicated its resolve to scrutinize compensation package policies of universal banks to ensure that remuneration for key management personnel including Chief Executive Officers are linked to the performance of the banks and quality of its assets.

The Governor of the Central Bank, Dr Ernest Addison, addressing journalists at the 91st monetary policy press briefing, added that “to ensure transparency, banks will be required to publish Value Added Statements disclosing details of the compensation packages of key management personnel and Boards of Directors separately from total employee compensation”.

Executive compensation in the banking sector has come under intense scrutiny around the world.

In Ghana, several critics argue that this was a contributory factor to the challenges which led to the meltdown in the banking sector.

Stakeholders and the public have been mounting pressure on regulators to curb the perceived excesses in executive pay level and arrangements.

The Central Bank of Nigeria, in May 2010, in line with its pursuit of radical risk management and governance reforms in the sector, introduced new prudential guidelines with stringent (public) disclosure requirements.

Very shortly afterwards in July the same year, the regulator reversed the new guidelines which attracted a lot of public uproar.

Nigerians believed the Central Bank of Nigeria was coerced to protect its colleague bankers.

The move by the Bank of Ghana to get universal banks to link compensation of bank executives with the overall performance of the bank is expected to ensure these executives earn their salaries as it is with all other employees of the bank.

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