6 November 2009

Kenya: Country's Top Earner Gets Sh3.9 Million a Month

Nairobi — The gap between the salaries of senior and junior employees in Kenya is widening, with a new survey showing that the highest paid chief executive earns more than 400 times the lowest paid employee.

According to the 2009 PricewaterhouseCoopers National Human Resources Survey, the highest paid CEO is earning Sh3.9 million per month, which is 414 times higher than the lowest paid employee. The said CEO works in the financial services sector.

The survey, which was conducted between June and October this year, says this represents a 55 per cent increase from 2007, when the highest paid CEO was earning Sh2.5 million per month or 315 times higher than the lowest paid employee.

"The survey's findings raise serious questions on pay equity among different cadres of employees," PWC Kenya country senior partner, Kuria Muchiru, said when launching the survey at a Nairobi hotel.

The lowest paid employee this year is the room steward in the professional services sector, who earns Sh9,450 per month up from Sh8,001 per month for 2007 when the lowest paid was a janitor/cleaner/tea lady in the manufacturing and services sector.

However, the lowest paid CEO is in the manufacturing and processing sector at Sh227,000 per month. This is a 17 per cent drop from Sh274,083 per month paid in 2007 to the lowest paid, then in the trade sector.

Among the non-management employees, a receptionist in the financial services sector is the highest paid at Sh188,219 per month, with a security guard in state corporations and public services as the lowest paid at Sh20,161. But there are civil servants who earn less than Sh20,161.

Mr Muchiru, who was flanked by PWC senior managers George Hapisu and Ms Naomi Mbogua defended the findings, saying the firm does not audit whatever information it is given because the survey is voluntary. "The five state corporations and public service organisations that took part may be on the higher end of the scale," he said.

The survey, which involved 110 organisations in both the private and public sectors, showed that the average remuneration of CEOs across all sectors has increased by 30.7 per cent since 2007, while that of junior staff increased by 10.5 per cent. The salary increment was made against an annual average inflation rate of 22.68 per cent amidst the economic slowdown and global financial crisis.

"Overall, it could appear that CEOs remuneration has outpaced economic growth. But the average employee is poorer now than he or she was in 2007," Mr Muchiru said in reference to the survey, which is carried out every two years. It is worth noting that the government changed its system of calculating inflation -- the measure of change in prices of goods and services -- to the Geometric mean approach.

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