Between 2017 when Anthony Masunga took over as managing director of Botswana Telecommunications Corporation Limited (BTCL) and 2023 when the company last published its full annual results, the seasoned executive's remuneration ballooned by 65%. Meanwhile, in the same period, BTC's revenues, a key measure of the listed company's growth, nosedived by 15%.
BTC's performance relative to its former managing director's remuneration puts into the spotlight the question of whether the performance of some of Botswana's listed companies justifies the hefty remunerations of their executives.
With the Botswana Stock Exchange (BSE) making an effort to bring more retail investors into the bourse, companies not being able to justify the millions they are giving to executives might act as an impediment for Batswana, and foreign investors, considering participating in the stock market currently dominated by institutional investors.
Since Masunga took over in 2017, BTC, which was listed on the BSE in April 2016, the company has struggled with growing its revenue every year. The highest revenue increase that the company achieved under Masunga was 1% in 2021, a concerning trend for a listed company. In his tenure, BTC saw a decrease in revenue in four of the six years under review per available annual results.
Before his abrupt exit last week, the company had been considering digitalisation and international expansion to boost revenue growth.
However, BTC's sluggish growth did not seem to bother the company's leadership, with board chairperson Lorato Boakgomo-Ntakhwana declaring the company's 1% growth in revenue in 2021 as an "impressive" financial performance.
According to BTC's remuneration policy, the amount paid to executives is based on achieving certain targets of profit before tax (PBT) which then triggers the payment of undisclosed bonuses, which formed part of Masunga's annual remuneration.
For example in 2018, despite BTCL's revenue dropping by 3%, he earned a performance bonus of P800,000 as the company's PBT surged significantly, per the graph below. The bonus, plus other fringe benefits totalling over P200,000, brought his total remuneration to over P2.8 million, a 56% increase from the previous year despite BTC having recorded negative growth.
In the course of his role, BTCL's profit before tax, a key determinant of Masunga's remuneration, cumulatively declined by 23%.
