Bank of Ghana to audit salaries of Bank CEOs and boards

The Central Bank of Ghana has served notice that it will undertake a scrutinization exercise into salaries of Bank CEOs and boards of all banks in the country. 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. He revealed that the Bank of Ghana would be working closely with banks to ensure that banks do not pass on their operational inefficiencies and overhead costs to their clients while living on juicy salaries.

“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 intimated that measures would be put in place to align compensation with overall bank performance by linking it to clear parameters including the quality of a bank’s assets. He further added that “Bank of Ghana will scrutinize compensation policies for Chief Executive Officers and key management personnel as well as Board of Directors of universal banks.”

Will scrutinizing the fat salaries of Bank CEOs and boards contribute to saving Ghana’s banking sector?

The banking sector reforms conducted in 2018, according to him, exposed a lot about how CEOs and boards of banks were allocating funds to themselves as compensation when the overall performance of the banks did not support such spending. The move, according to the central bank, is aimed at cutting down on the enormous salaries of Managing Directors who are not performing to satisfaction.

 

Source: Citi News