Why our directors’ pay for 2020 rose in naira — Nigerian Breweries

Beer-maker Nigerian Breweries Plc has reacted to a report by PREMIUM TIMES showing its directors’ emolument for the last financial year rose by over 25 per cent.

The company said while the naira value of the directors’ emolument indeed increased as shown in its 2020 audited earnings report, the basis for the news report, the increment was a result of foreign exchange variation.

“We would like to state unequivocally that our Directors did not get a big pay boost amid COVID-19 as portrayed in the headline and neither was the base salary of our Managing Director increased in 2020,” the brewer said in a statement by its corporate affairs director, Sade Morgan.

The beer maker’s financial statement shows its directors’ remuneration for last year at N702.537 million, compared to the N561.245 million of the year before.

Of that sum, N379.386 million went to the managing director, who is the highest paid director, relative to the N270.542 million he received for 2019.

“Like most expatriates working in Nigerian multinationals, our Managing Director’s salary and emoluments are benchmarked in his home country currency in this case euros,” the firm said.

“As such, the appreciation in the naira value of his salary is largely due to the devaluation of the naira against the euro in 2020, a factor over which we have no control.”

Nigerian Breweries Plc posted larger sales in 2020 when coronavirus lockdowns barred restaurants and pubs, forbade social events, and kept drinkers indoors.

Uchenna Ibemere, the brewer’s integrated communications head, said the development came from digital innovations in ordering and delivery as well improvement in distribution chain.

Sales and profits

The firm’s net profit in the nine months through September 2020 stood at N7.1 billion, 42.4 per cent weaker than the N12.2 billion reported in the same period of 2019.

The company cited high inflationary pressure, increased excise duty, and value-added tax as well as the coronavirus pandemic as grounds for underwhelming performance in an October statement.

In 2014, sales touched a peak of N307.23 billion since 2006 and are yet to return to that level.

A year before, the profit pool of the Nigerian beer market had reached its highest point in the period between 2000 and 2020 but fell to one of its lowest levels in that 20-year period last year with adverse implications for the company, which owns the largest share of the market.

Factors ranging from currency devaluation and tax hikes to promotional intensity, consumer down trading, and material cost inflation accounted for the profit pool decline.