Cabinet has approved a request by the Cayman Islands Stock Exchange (CSX) to award bonus payments to its employees for financial year 2020, as well as remuneration for council members of the government company.

“The approved bonus for all staff was CI$40,252 or 1.9% of CI$2.126 million, the audited net income for 2020,” CSX CEO Marco Archer confirmed Monday, following Cayman Compass queries.

Archer said both requests will be fully funded through the exchange’s budget, as he pointed out that no funding from the government’s annual budget is appropriated to the Stock Exchange.

“The CSX’s annual budget is funded entirely by revenue generated from services provided to issuers of securities locally and abroad. On the other hand, the Cayman Islands Government has received from the CSX over the past 20 years,” he said in an email to the Compass.

Over those 20 years, he said, an aggregate of dividends from the work of the CSX came to more than US$8.5 million, with dividends of around US$1.3 million for 2020, which is 50% of audited net income of CI$2.126 million for that year. These amounts were decided according to government’s approved dividend calculation formula, he said.

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Marco Archer, Cayman Islands Stock Exchange CEO.

The approvals for both CSX changes were made public in the post-Cabinet summary issued last week following cabinet’s 10 Aug. meeting.

Archer, in addressing the bonus award, said the staff of the CSX do not automatically receive a bonus.

This is only done, he said, “if the board decides that their performance and that of the Exchange is deserving of a bonus”.

Cabinet approved that council posts, which were previously unpaid positions, will now be paid after it agreed to the introduction of remuneration.

The council chairman will receive payment of $4,000 per month, deputy chairman $2,000 per month, and members $1,500 per month, all fully funded by the exchange’s budget.

Working pro bono

Archer said the chairman and board members of the CSX have worked pro bono from inception of the CSX in 1997 and received no remuneration or bonuses to date.

The requirement to remunerate the board members of the CSX is found in section 13 of the Public Authorities Act (2020 Revision) “which has not been complied with to date”, adding that oversight has been “remedied by the resolution of the PACT Administration”.

The ownership of the CSX by the Cayman Islands government, he added, “is anomalous”, as typically a stock exchange is privately owned and operates as a for-profit commercial entity.

“But evidently the current ownership structure means the CSX falls under the Public Authorities Act although it receives no funding from the Government’s annual budget,” he said.

CSX recorded strong numbers last year with the ‘2020 Economic Report: Stock Exchange’ stating that stock listings on the Cayman Islands rose by 12.4% to reach a record 2,336.

This increase was attributed mainly to higher listings for specialist debt securities, which rose by 21.5% to 1,879.

“Consistent with the increase in listings, market capitalization rose by 7.5 percent to a record US$458.8 billion. This mainly reflected an increase in specialist debt securities, which rose by 10.9 percent to US$292.8 billion. For the year specialist debt securities accounted for 63.8 percent of the total market capitalization,” the report added.

Payments to CIMA

Meanwhile Cabinet, the summary stated, approved performance award payments to the staff of the Cayman Islands Monetary Authority for the year ended 31 Dec. 2020, fully funded by the authority’s budget.

Cabinet, according to the summary, has approved the establishment of, and investment in, the Commonwealth Climate Growth Fund (Cayman) LP, “which provides an opportunity for the Cayman Islands to participate in implementing solutions to address climate change”.

The figure for that investment was not released.

Cabinet also approved the current membership of the Trade and Business Appeals Tribunal which comprises Alistair Walters as chair, Stuart Bostock as deputy chair, and Jason DaCosta, Lisa Galbraith and Kimberley Ebanks as members.

Alicia Reid was appointed secretary (non-voting), replacing Miguel Jacques.

In addition, Cabinet approved increases in the 2021 appropriations for the Ministry of Education for various scholarship initiatives, and approved a temporary waiver of sitting the SAT as a scholarship requirement for the fall 2021 semester.

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