The Bank of Ghana (BoG), has served notice that it will soon scrutinize the salaries of Chief Executive Officers and compensations for boards of all banks in the country.
The move according to the central bank is aimed at cutting down on the huge salaries of Managing Directors who are not performing to satisfaction.
Reacting to a question after maintaining the policy rate at 16 percent, the Governor of the Bank of Ghana, Dr. Ernest Addison, explained that one of the benchmarks for reducing the salaries of Managing Directors and CEOs of banks will be the amount of loans a bank has given out and collected or not collected.
“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,” Dr. Addison stressed.
He explained that the Bank of Ghana will be working closely with banks to ensure that banks do not pass on their operational inefficiencies and overhead costs to their clients while enjoying huge salaries.
He stated that steps will be taken to align compensation with overall bank performance by linking it to clear parameters including the quality of a bank’s assets.
“Bank of Ghana will scrutinize compensation policies for Chief Executive Officers and key management personnel as well as Board of Directors of universal banks”.
According to him, the banking sector reforms conducted in 2018 revealed a lot about how CEOs and boards of banks were allocating funds to themselves as compensations when the overall performance of the banks did not support such spending.
Source: citibusinessnews.com
