Know the high salaried bank CEOs

Top management officials at a number of listed banks in Bangladesh earn exponentially more than other employees.

In some cases, the shareholders’ dividend may have remained unchanged, but the benefits package, which includes the salary of the bank’s managing director (MD) and chief executive officer (CEO), has risen dramatically.

In 2021, Mutual Trust Bank (MTB) Ltd paid its MD and CEO Syed Mahbubur Rahman Tk 2.93 crore in salaries and honorariums, up from Tk 2.62 crore the year before.

With a monthly remuneration of Tk 24.49 lakh from MTB, Syed Mahbubur Rahman is the highest-paid MD and CEO among all listed banks in Bangladesh.

Meanwhile, MTB recommended a 10 per cent stock dividend to its shareholders for the year ending December 31, 2021, just the same as the previous year.

Ali Reza Iftekhar, the MD and CEO of Eastern Bank Limited (EBL), is ranked second on the list, receiving a salary of Tk 2.84 crore in 2021, up from Tk 2.63 crore last year.

He now receives Tk 23.7 lakh from the bank every month, an increase of 8 per cent in annual pay from the previous year.

EBL however has cut its dividends to shareholders by 10 per cent. In 2020, the bank paid a total dividend of 35 per cent, while it recommended a 25 per cent dividend in 2021.

Three more listed banks are similarly paying their CEOs and MDs more than Tk 2 crore per year in salaries and perks.

The remuneration of the MD and CEO of Al-Arafah Islami Bank Limited (AIBL) has been raised by 5 per cent over the previous year, although the dividend for the bank’s shareholders has remained unchanged.

AIBL MD and CEO Farman R Chowdhury receives a monthly salary and honorarium of Tk 17 lakh.

Similarly, President and MD of Bank Asia Md Arfan Ali is receiving a monthly salary and honorarium of Tk 17 lakh, while MD and CEO of City Bank Mashrur Arefin is getting Tk16.91 lakh per month. Southeast Bank MD and CEO M Kamal Hossain draws the lowest Tk 8.67 lakh among all 32 listed banks in Bangladesh. Southeast gave12 per cent  dividend in 2021.

Although the revenue and spending statements of all publicly traded companies must be approved by the shareholders at the end of the year, in some cases, the matter of setting the salaries of the MDs or CEOs is not discussed at the annual general meetings.

In this regard, Dhaka Stock Exchange (DSE) Shareholder Director Sharif Anwar Hossain said, “As far as we know, the board of directors approves the appointment of the auditor and its fees, as well as the appointment of the MD or CEO of the
organization.”

“Since most of the banks are listed in the capital market, there may be a discussion as to why some banks are paying their managing directors so much, a matter which should be discussed with the board seniors first for approval at the annual general meeting.”

Shaikh Shamsuddin Ahmed, the commissioner of the Bangladesh Securities and Exchange Commission, said, “The Corporate Governance Code mandates the formation of a Nomination and Remuneration Committee to ensure that employee salaries are consistent among listed companies.

“However, there are inconsistencies in the salaries of top management officials and other employees because the Bangladesh Bank does not enforce this code for scheduled banks.”

Meanwhile, Agrani Bank MD Shams-Ul Islam said, “Salaries of MDs are determined by their competence and the bank’s overall performance. The salary of Agrani Bank MD used to be Tk 11 lakh, but it is now Tk 4 lakh.”

Four of the 15 banks that pay handsome salaries to their MDs and CEOs have, however, lowered employee salaries while increasing the salaries of their MDs and CEOs.

Standard Bank is one such organisation that has increased its MD’s salary by more than 5 per cent while cutting salary allowance spending by 1.4 per cent in 2021 compared to the previous year.

Meanwhile, Midland Bank Ltd, which is not publicly listed, has cut salary allowances by 12 per cent, while increasing its MD’s remuneration also by 12 per cent. Ahsan Uz Zaman, the bank’s MD and CEO, is paid Tk 1.83 crore per year, or Tk 15.32 lakh per month.

This list also includes Uttara Bank and ICB Islamic Bank.