Her pay is split into a basic fixed component of R6.7 million (no increase from 2012) and variable remuneration of R22 million. The variable remuneration for 2012 was R10 million – this being the year when Ramos “requested to forego consideration for an annual bonus award” because the results were not good.
Absa says her latest variable bonus component, spread over 2014 to 2017, is for the “strong personal contribution made by Maria during 2013, particularly in building and embedding a strong leadership team, the continued implementation of the One Africa strategy and the significant progress made against the group’s objective to become the “Go-To” bank in Africa”.
Analysts say this may be overly generous in a year when Absa lagged the others in the big five banking groups, serially underdelivered on minority shareholder returns while favouring the parent company, and Ramos came under fire for being distracted by other responsibilities and unrelated directorships.
Analysts comment that for the 2012 financial year, Absa earnings were conspicuous by their underperformance, dragged down 10% due to bad debt provisioning.
Its competitors were posting significantly improved earnings for the same period.
BAG recovered somewhat in the 2013 financial year, but coming off such a low base, the recovery was inadequate and disappointed the market.
It also overpaid its own parent company, Barclays, for the Barclays Africa assets – which are higher risk and come with earnings volatility.
BAG is an exceptionally generous dividend payer – but only because it cannot profitably reinvest shareholder funds (hence the special dividend last year of R7.08 per share in November) and because its UK parent (described by its own CEO Antony Jenkins as needing to stave off a “death spiral”) is hungry for cash inflows.
Analyst reports come with a long list of further criticism of Barclays Africa and its management. To mention a few – Barclays PLC is accused of interfering in day-to-day operations, and has in fact guided its subsidiary into some bad decisions (reining in retail lending at the wrong point in the cycle).
As we move into an upward interest rate cycle, Absa’s coverage ratios on its core retail products have come down and this is a concern. There have been committee restructurings and then even further changes; senior staff departures are notable; it struggles to grow its revenues and rather focuses on cost cutting which shrinks the business; its restructuring policy on non-performing loans is not as conservative as the peer group; and portfolio provisions are still notably lower than some of the competition.
Snapping up staff from other banks has not helped stem the destruction in shareholder value and analysts point out that Absa management still lacks depth, experience and ability.
Clients continue to exit in their droves with the 2013 year saying goodbye to one million retail transactional and several thousand small business clients.
For the past five years it has posted a poor 3.3% compound annual growth rate in revenue, which coincides with roughly the same period Ramos has been CEO (she was appointed in March 2009).
As the Absa share price has weakened, the corporate action speculations have got bolder and more radical.