Nairobi Securities Exchange reading platform. [ photo / African market. ]
All companies listed at Nairobi security exchange (NSE) will now be required to disclose the amount of money to be paid to its Chief executive Officers fired before end of his term of contract.
According to the bourse new rules dubbed, companies Regulations 2017, the firms will be required to know the consequences of firing a director before his term ends and will file his or her renumeration and compensation plan before NSE.
“A director’s remuneration report shall contain, in relation to a director’s contract of service provision for compensation payable upon early termination of the contract,” reads part of the new amendments to the companies law.
The new amendments comes after a series of compensation cases by fired CEOs' at the courts costing companies hundreds of million of shillings.
Recently former CEO of TransCentury TCL investments company went to court demanding terminal benefits amounting to over Sh21 million for wrong dismissal.
Prior to his case former CEO of Olympia investments Capital sued the firm and demanded an equivalent of his annual salary after wrongful termination of his contract in February 2014.
Former KQ's Finance Director Alex Mbugua last year sued the national carrier for wrongful dismissal. The court however this month ordered his reinstatement or Sh144 million payout.
Analysts have however said that the rising disputes has offered a rare peek into the unrealistic severance packages promised to CEOs at the time of hiring and they now believe it is what the new company law wants disclosed in annual reports.