SA’s R43m -a-year ceos

2010-01-30 13:34

PARLIAMENT will push for a ­complete review of state-owned

­enterprises as early as April.

This could result in government putting a cap on the remuneration

packages of parastatals’ executives.

Vytjie Mentor, chairperson of the portfolio committee on public

enterprises, said the parliamentarians would seek the review from April, before

the Soccer World Cup grounds South Africa to a halt in June.

“The remuneration packages are bordering on being obscene. You

can’t earn R500 000 a month in the public sector. We are a developing country

and those who are in this for the money must go.

“I don’t understand why the executives of our state-owned

enterprises (SOEs) are paid huge bonuses. We pay them to do their jobs well, not

for mediocrity. The president of this country is not paid a bonus for performing

well,” Mentor said.

She said the boards of South Africa’s parastatals were not

accountable to anyone and government needed to develop uniform legislation to

rein them in.

“There is no regulatory mechanism to control the boards. They are

almost a power unto themselves,” Mentor said.

The inspection will look at the mandates of the parastatals, their

accounting policies, remuneration packages and performance management

practices.

“Have you ever heard of the board of an SOE being removed for

­non-performance,” asked Mentor. “We need to tighten our oversight over them. We

need to audit all of them.”

She said the review would be done in conjunction with the cabinet,

SOEs, interested people and ­experts.

Earlier this week, the media reported that former Eskom chief

­executive Jacob Maroga was suing the cash-strapped electricity ­parastatal for

R85 million.

According to Eskom’s yearly ­report last year, Maroga earned a

basic salary of R5 million. He took home R4 million in 2008.

He was also awarded shares worth millions of rands despite the

parastatal performing poorly. Last year, Eskom posted a R9.7 billion loss, its

worst performance ever. The power generator and distributor is still searching

for a new boss.

Eskom is perhaps the worst case when it comes to rewarding

­non-performance, but it’s not the only one.

Public broadcaster the SABC also awarded bonuses to its executives

and paid a huge salary to its suspended chief executive ­Dali Mpofu despite

posting a R910 million loss and requiring a substantial financial

recapitalisation. The SABC’s yearly report last year showed that Mpofu took home

a total pay package of R8.9 million, which included a basic salary of R8.4

million.

Late last year, the public broadcaster gave Mpofu R11 million to

walk away from his job. The broadcaster has since appointed former Telkom Media

chief content officer, Solly Mokoetle, as its new chief.

The SABC is one of two parastatals in a City Press study that have

competitors. But even these are not direct competition. Other parastatals are

monopolies and it is very difficult to compare pay packages with rivals.

SABC’s rival, Primedia, paid its former chief William Kirsh a total

package of R12.5 million in 2006, the year in which it last published its

financial results after it was delisted from the JSE by the private investors

who bought it in 2007.

In 2006 Kirsh earned a basic salary of R1.8 million and a

R3.2 million cash bonus. Primedia, the owner of radio stations such as 702 Talk

Radio and 94.7 Highveld Stereo, paid the balance of his package in share

options.

Another SABC competitor, Naspers – owner of pay-TV option DStv and

newspapers such as City Press and Rapport

– pays its chief executive Koos Bekker in

shares. Naspers’ second-in-command and financial director Steve Pacak was paid a

package of R5.3 million last year.

The last chief executive of state-owned airline SAA, Khaya Ngqula,

walked away with R13.6 million last year. The figure included a R9.3 million

golden handshake he received to leave the company following a fraud and

corruption probe.

When he was SAA’s boss, Ngqula earned more than the joint chief

­executives of Comair, Gidon Novick and Eric Venter, took home.

Comair, the company that operates rival airlines British Airways

and kulula.com in South Africa, paid Novick and Venter R3.2 million each last

year.

Former Transnet boss Maria ­Ramos, who is now Absa Bank chief

executive, earned R5.3 million last year from the freight transport and

logistics company.

Industrial Development Corporation head, Geoffrey Qhena, earned

R10.3 million last year.


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