Chikaonda, TNM board get 125% pay rise as subscribers soar
Professor Mathews Chikaonda, as Board Chairman of Telekom Networks Malawi (TNM), and non-Executive Directors have awarded themselves 125 remuneration hikes, which has been approved with reservations by shareholders at the company’s annual general meeting on Thursday.
Following the approval, now Chikaonda will be pocketing K2, 250,000.00 per annum from K1, 000, 000.00 with his meeting attendance fee rising from K60, 000 to K150, 000.
And this comes at the time when TNM has declared final dividend of K301.2 million (3 tambala per share) for the period ended December 31st, 2012.
Chairman of Board Committees is expected to pocket K1.8 million from K800, 000 with meeting attendance allowance rising from K60, 000 to K120, 000 while other non-Executive Directors will be getting annual remuneration of K1.5 million from K800, 000.
The remuneration increment, however, was approved with some reluctance from the shareholders who demanded justification aside questioning the 3 tambala per dividend allocation.
But Chikaonda and his team comprised of vice chairman, Hitesh Anadkat and the company directors argued that they were under paid and that their positions are risky, hence deserve hefty package.
“We are at risk here. We take personal responsibility to ensure the company’s business is in good shape. If chips are down, its directors who get the handle. If anything goes wrong at the company, it is us who will be liable,” justified Chikaonda.
And on his part, Anadkat argued that the remuneration was still low comparing to the job they are performing to ensure the company is striving and continue posting profits.
Anadkat said: “We are still underpaid at this rate. And be aware that we are at risk that is why we deserve something like that. And the increment was done to avoid complacency on the side of the directors”.
On Thursday the company declared a final dividend of K301.2 million with shareholders getting 3 tambala per share, a sheer rise from previously 2 tambala per share.
Chikaonda said the company has posted good profits, which reflects the strides it has made in terms of development with customer growth currently at around 45 percent-now TNM has 1.92 million subscribers.
“2012 was volatile year for our company. We experienced high revenue growth and rapid currency depreciation which more than doubled the cost of our capital expenditure programme and significantly increased finance charges on our largely foreign currency denominated debt. Overall our profit after tax declined 49 percent to K0.49 billion on service revenue growth of 43 percent.
“Over 2012 the measure of overall growth of the telecommunications market in Malawi, the penetration rate, grew from 23 percent to 27 percent. We grew our share of the market more than proportionately (as we have consistently in the past) by 24 percent to reach 1.92 million subscribers which increased our market share to 45 percent from 42 percent in 2011”.
However, he said the company did not expect same volume of growth on the market in 2013, saying “As measured by penetration rate in 2013 primarily because the negative trends experienced towards the end of 2012 have continued in 2013”.
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