Mark Lamberti’s gesture a drop in the ocean

2014-10-19 15:00

It should be increasingly difficult for South Africa’s top executives to justify their enormous pay packages, given the furore over excessive pay, the country’s high level of unemployment, and the huge disparity between the highest- and lowest-paid employees at companies.

But somehow, it is not. Most CEOs and top executives in the private and public sectors feel entitled to the millions of rands they earn each year, citing, when pushed, international comparisons and their onerous responsibilities.

Mark Lamberti, the new CEO of the Imperial group, is one of very few CEOs to have done some introspection on this issue and acted on it.

He will forfeit his salary and bonuses, and at his suggestion, Imperial will make those funds available to children of employees earning below a threshold for the payment of university fees. He still intends to make money in his job, but through agreements which will see him get shares in the future should he meet certain performance criteria.

As part of this agreement, he has also committed shares he has bought.

Lamberti is not a pioneer. Johann Rupert, who held top positions at Richemont and Remgro, where his family are major shareholders, has donated his salary and benefits to charity for years.

Koos Bekker, the former CEO of Naspers, which owns this newspaper, took no salary but had a share-linked performance contract, now worth billions of rands. Ketso Gordhan, the former CEO of PPC, and a number of other executives have, from time to time, taken salary cuts or freezes.

These are all a drop in the ocean as executive pay and an ever-growing list of benefits continue to mushroom while low-level workers are finding it increasingly difficult to make ends meet. To make matters worse, these workers need to support more unemployed family members and many companies set below-inflation wage increases.

But Lamberti’s initiative is commendable. He is required to work hard and make a difference, for his benefit and that of his employees, before he reaps any financial gain.

His company’s success will be his and if he achieves it, it is doubtful anyone would begrudge him the financial benefit.

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