Group Faults Payment of N755m as Compensation to Three NGX Directors

By Nseobong Okon-Ekong
Following the publication of its 2021 full year report which disclosed payment of N754.87 million as compensation to three Executive Directors of the Nigerian Exchange Group Plc (NGX), a rights and transparency group, Nigeria for All Nigerians (NAN), has raised an alarm on the “reputation and integrity” of the NGX directors.
“This is a major disclosure,” Mr. Dele Ajanaku, NAN’s Secretary General said. “It hurts. This is the kind of scenario we warned against last October when we called on concerned regulatory authorities to stop violation of the Nigerian Investments and Securities Act by not allowing Mr. Oscar Onyema to serve as MD/CEO of NGX Group and also a non-executive director on the NGX Ltd, the Exchange on which NGX Group is listed, which is in contravention of SEC Rule 184(2).”

NGX made an operating profit of N320 million in 2021 but paid its three Executive Directors N750m. Shareholders value was massively eroded by a cost structure that serves these executives to the detriment of shareholders, said brokers who spoke on the condition of anonymity to our reporter. All the brokers shared the same notion that, “The reason this is taking place is because the shareholding base of the NGX is terribly fragmented thus allowing management a free rein.”They opined that the exchange is run for the benefit of the executives and not the shareholders.
The highest paid board member, the MD/CEO as revealed in 2021 audited financial report earned N160.02 million as remuneration from N156.2 million in 2020.
The Nigerian capital market is supervised by the Federal Ministry of Finance. Control of public expenditure can be done through adequate budget implementation. “One of the biggest issues allowing the emergence of this scandalous earnings by the three NGX directors is poor governance,” according to Ajanaku.
The NGX Group reported N2.25 billion in profit, representing a 22 per cent increase from the N1.84 billion reported in 2020, even as its revenue grew by 14.9 per cent to N5.78 billion from N5.03 billion in 2020. They made an operating profit of N320 million for shareholders and the directors paid themselves close to N800 million. “In an economy where a majority of the population are poor and inflation has made their spending power weak, it is scandalous that three directors of NGX would earn the kind of amount reported in their report, while its non-management staff dropped to 176 from 241 recorded in prior year.”
The NAN statement pointed out that earnings of the three NGX who include its Group Managing Director/Chief Executive Officer, Mr. Oscar Onyema; Chief Executive Officer, NGX, Mr. Temi Popoola and Chief Executive Officer, NGX REGCO, Ms. Tinuade Awe may pose one of the biggest threats to investor’s confidence. Struggling companies and individuals may begin to pull away, while frowning at the lifestyle of these NGX directors, which will lead to extreme budget problems, unemployment and health costs, unless the Federal Government steps in, the group added.
Ajanaku noted that the NGX directors were tending towards fiscal irresponsibility “by taking care of themselves in good times, but reducing the number of management staff. This is very insensitive of their operating environment, which is right now going through a lot of pains.”
The NAN Secretary General further described the disclosure of the earnings of the three NGX directors as “early warning signs showing a strong indication of the imminent direction they are taking the NGX, which is why we call on the Federal Government to act now before the NGX’s credibility is damaged as we are in a fragile period.”