The National Treasury building in NairobiUnder the revised structure and remuneration package approved by the Salaries and Remuneration Commission, parastatal chairs will now receive monthly honoraria of Sh130,000.
Currently, parastatal board chairpersons earn about Sh80,000.
SRC chairperson Sammy Chepkwony informed State Corporations Advisory Committee (SCAC) chairperson Philip Mong'ony of the new rates in a letter dated October 13, 2026.
The decision followed a request by SCAC in June and was approved during the commission's meeting held on October 6.
Board members will not receive monthly honoraria but will earn Sh30,000 for every sitting, up from the current Sh20,000.
Chairpersons will receive the same sitting allowance in addition to their monthly honoraria.
Considering there are about 290 parastatals in the country, the cost of honoraria alone will go up by Sh174 million.
The revised package also provides for enhanced facilitation and insurance benefits, including medical cover.
It also has telephone allowances, daily subsistence allowances and transport reimbursement.
The changes came at a time when the government is under pressure to the public wage bill, which is among the major demands on public resources.
President William Ruto’s administration has admitted it faces a tough balancing act in managing spending commitments in the wake of the debt and mounting wage bill (at Sh1.3 trillion annually).
In April 2024, the Cabinet approved revised guidelines on the terms and conditions of service for state corporation boards and staff.
Cabinet said the reforms were aligned with President William Ruto's directives on fiscal consolidation and the management of state corporations.
For chairpersons currently receiving Sh80,000, the additional Sh50,000 translates into Sh600,000 annually before sitting allowances and other benefits.
A chairperson attending four board meetings in a month would receive Sh120,000 in sitting allowances, bringing monthly payments to Sh250,000.
Board members attending four meetings would earn Sh120,000 in sitting allowances before other benefits.
The amount excludes telephone allowances, travel facilitation and insurance benefits.
The commission has approved a monthly telephone allowance of Sh7,000 up from Sh5,000 for chairpersons, and Sh5,000 for members.
Members will also receive a daily lunch allowance of Sh2,700 where lunch is not provided, an increment of Sh700 from the previous rates.
Transport, where official transport is unavailable, will be reimbursed at Automobile Association rates.
For official travel, board members will qualify for local and international subsistence allowances pegged on the Job Group 'U' equivalent rates.
Job Group U is the same level as chief executive officers, and gets up to Sh22,000 in daily subsistence allowance.
The medical package provides inpatient cover of up to Sh3 million annually, outpatient cover of up to Sh200,000 and last-expense benefits of Sh200,000.
State corporations have also been directed to procure personal accident insurance for board members travelling on official business.
The letter also contains provisions aimed at enforcing the approved ceilings.
State corporations paying above the maximum limits will be required to comply immediately.
Serving board members will, however, retain their prevailing rates on a personal-to-holder basis, subject to their current contracts.
“State corporations paying above the approved maximum ceiling will be required to comply from the effective date of this letter, except for the serving board members who shall retain their prevailing rates on a personal to holder basis subject to the current contract,” Chepkwony said in the letter seen by the Star.
This means the implementation of the revised package will depend partly on existing contractual arrangements and the rates currently paid by individual corporations.
SRC is constitutionally mandated to set and regularly review remuneration for state officers and advise national and county governments on the pay of other public officers.
When setting pay, the commission is expected to consider fiscal sustainability, fairness, transparency, productivity and the need to attract and retain skills in the public service.
Board members oversee state corporations that manage public assets, deliver services and undertake commercial activities on behalf of the government.
The guidelines on their terms of service show they are entitled to telephone allowance, telecommunication devices, accommodation allowance, among other perks.
INSTANT ANALYSIS
While boards play a crucial oversight role, the review raises questions about affordability, value for money and whether increased compensation can be justified when the government is urging restraint across public institutions.
