The bonus bonanza from UAE-listed companies
Published: 13:17 May 22, 2016
Dubai: It was raining bonuses for the top management of UAE listed companies in 2015, but analysts are sceptical about a similar payout this year.
About 70 public listed companies including property majors along with financial services companies excluding banks on the Dubai Financial Market and Abu Dhabi Securities Exchange paid more than Dh800 million in bonuses to more 700 officials from the top management last year from Dh40 billion made in profits. Emaar Properties was the most generous in giving out bonus to the top management, followed by telecom majors like Etisalat and Waha Capital.
“2015 was a good year for many of those companies. Nobody today would argue that the management of public companies who make money for shareholders get rewarded handsomely under the parameters of the law. That parameters of the law can look very generous if the company does profits in billions, and can look below market if company does profit below 10s of millions,” Mohammad Ali Yasin, managing director at National Bank of Abu Dhabi Securities told Gulf News.
Emaar Properties, which is the UAE’s property major, paid Dh76.2 million to board members and senior executives, while Etisalat’s bonus totalled Dh54.5 million, and Waha Capital distributed Dh34.9 million. Aldar Properties came fourth in terms of the value of bonuses with Dh34.2 million, followed by Dubai Investment with Dh32.6 million, and Damac with Dh25.6 million. Du came in sixth with Dh9.25 million.
“If you are in a company whose market capitalisation is $10-15 billion and makes a profit of $2 billion for that year, you are talking very substantial. If the company does not perform, this kind of money won’t be made available for them,” said Yasin.
Eleven companies listed on the property index accounted for 27.6 per cent (Dh224.68 million) of the total bonuses and allowances given to board members and senior executives. Meanwhile, bonuses given by eight service companies accounted for 15.7 per cent — about Dh127.5 million.
However, in the backdrop of a tough market environment, analysts are sceptical if companies would continue to shell out such bonuses.
“I don’t think in 2016, given the market environment they would be able to take home the same amount of money,” Yasin said.
Oil prices, which has been the major driver of sentiment, fell more than 30 per cent in 2015, only to recover nearly 70 per cent from its lowest level in more than thirteen years, Moreover more corporates have publicly announced job cuts as they align strategies to a low-growth environment.