Eskom’s fat-cat salaries

2010-07-04 10:05

Worker attitudes at strike-threatened Eskom will harden with news that the power utility’s executives received bonuses adding an average 25% to their packages, while workers threaten to strike for a wage increase demand of 9% plus a housing allowance of R2 500 per worker.

Chief executive Brian Dames received the highest increase at 91% of his 2009 package and a R2.1million cash bonus.

He says it was a accumulated over years for various performance targets but unions are using the information as bait for a strike.

Three unions at Eskom – the National Union of Mineworkers (NUM), the National Union of Metalworkers (Numsa) and Solidarity – met in emergency sessions this weekend after news of the executive payouts emerged.

Eskom’s remuneration report, released on Thursday, revealed that the parastatal’s top six executive directors and executive committee members got 25% more cash in the 2009 financial year. This pushed Eskom’s executive salary bill to R20million from last year’s R16million.

The amount included a R4.7million reward to former Eskom chief executive Jacob Maroga, who was paid for the seven months he spent in the parastatal’s employ before his controversial exit last October.

Maroga’s successor Dames also took home R5.9million for his position as chief of the generation business, responsible for maintaining adequate coal stockpiles and uninterrupted electricity supply.

The remaining four executive committee members received an average 59% cash increase on their 2009 salaries and short-term bonuses, totalling R5.3million, awarded both for delivering targeted savings last year and for Eskom’s R3.6billion profit this year.

Yesterday economist Mike Schüssler slammed Eskom’s ­executive committee, saying it had acted immorally when it ­allowed the huge pay increases – ranging from 25% to 91%.

“Eskom’s executive committee is immoral to allow such huge increases for themselves while electricity increases of 25% will be forced upon consumers year after year for the next few years,” he said.

Schüssler expressed concern at the demand of Eskom employees in a similar way that he did to the company’s huge pay rise for its top managers.

“This shows that Eskom is in a position to hold the country to ransom as it has no leadership and is a monopoly. The executive committee should step down over this shame and workers who strike illegally should be dismissed and prosecuted,” he said.

Eskom workers, Schüssler said, already received among the highest salaries in the country and have received increases way above inflation.
On average, ­Eskom workers earn R10000 per month and ­Eskom’s salary bill was R14.7billion last year.
Meanwhile, on Friday trade union ­Solidarity expressed shock at the amounts received by top management while National Union of Mineworkers of SA (Numsa) leader Irvin Jim yesterday said it did not augur well for parastatals “to pay exorbitant salaries to a ­tiny elite with absolutely no ­equity between them and ­workers”.

Solidarity spokesperson Jaco Kleynhans said: “At a presentation, Eskom gave us all kinds of information and we worked out that the executive increases ­varied from 73% to 91%.”

Solidarity had set Eskom a deadline to respond to its wage demand by tomorrow.

But Solidarity general ­secretary Flip Buys said that in light of these figures the union could not wait until tomorrow’s meeting. ­

He said: “Eskom’s performance can be ­attributed to ordinary workers who maintained the network ­despite a lack of support from top management and the public who have had to cough up for big price increases.”

Jim said the lack of equity ­between remuneration of ­executives and general workers could lead to the collapse of a “very critical institution”.

He said Numsa and the ­National Union of Mineworkers (NUM), who together hold a ­majority union membership at the ­utility, will today go public on their strike game plan.

NUM spokesperson Lesiba Seshoka said the high salary ­increases for executives showed the extent to which Eskom ­executives put their needs before those of ­customers and workers.

He said: “I am surprised that the CEO of Eskom was saying workers must put the country first yet they are failing to put the country first. It is an irony. In fact, we are shocked to the bones by the ­executive salary ­increases.

Asked at a press conference about the increases, Dames said the salaries were determined by the board according to set ­policies.

None of the executives were board members at the time.

Dames said: “It is malicious to quote overall figures that include the incentive benefits for ­performance over a number of years.”

He was responding to a question about whether it was fair to offer labour an 8.5% salary ­increase and R1 000 monthly housing allowance in relation to management’s huge increases.

Dames said that the ­bonuses were paid for work ­carried out over the past few years. He also said Eskom pays an annual R200million towards the housing needs of its ­employees.

An Eskom official said ­Bhabhalazi Bulunga, the ­parastatal’s managing director for human resources, was the only one mandated to speak on this matter.

Bulunga could not be reached for comment yesterday.

– ­Additional ­reporting by Finweek and Sapa

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