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Football and insurance square off in salary war

02 September 2014 Jonathan Faurie
Jonathan Faurie, FAnews Journalist

Jonathan Faurie, FAnews Journalist

We sit and watch football matches almost every weekend and are entertained by the moments of sure brilliance, or are heartbroken by moments of pure stupidity. While South Africa is one of the most passionate sporting nations in the world, everyone is an armchair critic. We all look at what top sportsmen are earning and we think: “jeepers that is a lot of money to be paid for playing sport.” Or, “I would do a lot better than that for his salary.” We are also quick to criticise footballers when they complain that they are playing too much sport.

With 2014 being a World Cup year, the earning potential of the world’s football players was brought to the fore. In its recent Insurance Survey, KPMG provided insight into the earning potential of football players when compared with executives in the insurance industry. Derek Vice, Manager of Insurance and Financial Services at KPMG, points out that both football and insurance are international games therefore; this will be a fair comparison.

PSL kick off

South Africa’s Premier Soccer League (PSL) has often been described as one of the best leagues on the continent. This is backed up by the fact that African players who cannot make the grade internationally turn to South Africa as their safe haven.

According to an article published by Kick Off Magazine, the top six earners in the PSL earn between R3.5 million and R5 million a year. The next tier of footballers, which included 20 players, earn between R2.5 million and R3.5 million a year. The third tier of footballers, which included 50 players, earn between R1 million and R2.5 million a year.

In order to compare this with the earning potential of a South African insurance executive, Vice took the information regarding earning potential off the financial statements of South Africa’s top 25 insurers. KPMG looked at the salaries of Chief Executive Officers (CEOs), Managing Directors and in the absence of information for these two positions being made available, the company looked at the salary earned by the highest paid Executive Director.

“Based on this, it was immediately obvious that the life insurance CEOs earn significantly more than their short-term counterparts. The average remuneration, including the effects of share options, for life executives was R15 million, with the highest exceeding R28 million and the lowest at R4.4 million. The average short-term and re-insurer salary was closer to R5.5 million. The highest being R16.8 million and the lowest, for a relatively new start up insurer, is R1.1 million,” says Vice.

Vice points out that this is a clear indication that the insurance industry is the place to be in the local market. The top six insurance executives earned an average of R20.9 million, while the next 11 were still earning more than the R5 million ceiling for local footballers.

Moving international

There is one factor that we need to take into consideration. While the insurance industry has taken a slender 1-0 lead on the scoreboard, many South African insurers are part of multinational groups.

Surely it is only fair that we compare the insurance industry’s earning potential with South African players playing abroad. In this space, we only have information on Everton midfielder Steven Pienaar who earned an estimated $5 million in 2013 which levels the score for the football boys as this is significantly higher than any insurance executives in KPMG’s sample.

Because Africa is opening its doors to insurers we can also compare the insurance industry to the earning potential of other African players who play their trade globally. Current African Footballer of the Year Yaya Toure earns an estimated $21 million a year while his countryman Didier Drogba earns an estimated $17.5 million a year, which puts him in third place. In second place is former African Footballer of the Year Samuel Eto’o, who earns $20 million a year.

But outside of the top five footballers, the earning potential levels out. Vice points out that the average earnings of the top ten African footballers is $12.5 million a year while the average earnings of the top ten insurance executives is $15.62 million a year. The lowest insurance earner in the top ten earned $9.88 million a year. John Obi Mikel, the lowest paid African footballer in the top ten, only earned $6.1 million a year.

Bring in the big guns

There is a lot of public information on the earnings of top international insurance executives. Daniel Amos, CEO of Aflac, earns $27.97 million a year and owns $273 million in company shares. Arthur Ryan, CEO of Prudential Financial, earns $15.61 million a year while Martin Sullivan, former CEO of AIG earns $11 million a year.

How does this compare with what the world’s top footballers earn? Cristiano Ronaldo currently earns $73 million a year, while Lionel Messi earns $65 million a year. Zlatan Ibrahimovic, currently the world’s third highest paid football player, earns $34 million. These salaries are not taking into account endorsements, which put them even further ahead of their insurance counterparts.

Donate the boots to charity

There are no doubt many of us in the industry that had childhood aspirations of being a professional football player. Looking at what these players earn, this becomes a very attractive option. However, the shelf life of a football player is 32 years old while insurance executives last considerably longer.

Perhaps there should be a thought that football players should look into pursuing a career in insurance after their football careers are over. Financial planners who focus on the football industry will be in high demand as football players will need guidance on how to save their accumulated wealth.

Editor’s Thoughts:
Insurance is a passion, and it is proving to be profitable. The salaries of top insurance executives are a perfect motivator for people who are thinking of pursuing a future in the industry. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

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