Saru execs get huge salary, bonus hikes

2013-05-03 00:00

JOHANNESBURG — The South African Rugby Union’s 2012 annual report shows that full executive members of its executive council were awarded massive salary and bonus increases, even though the union suffered a huge slump in profits last year.

Page 51 of the annual report reveals that Saru’s after-tax profit plunged 87% to R2,347 million in the year ended December 31, 2012, down from R18,554 million the year before.

However, that didn’t prevent full executive council members (ie those with full executive status as opposed to non-execs) from having their collective salaries increased by 21% to R3,379 million in 2012, from R2,785 million the previous year.

Not satisfied with that pay rise, full executive members of Saru’s executive council were also awarded cumulative bonus increases of 107% for a total windfall of R1,591 million, more than double the R769 218 in bonuses paid the previous year.

What’s more, the 107% increase in annual bonuses for full executive members appears to have gone to just two people, Saru’s chief executive officer Jurie Roux and chief financial officer Basil Haddad.

Saru’s general manager for corporate affairs, Andy Colquhoun, confirmed in an e-mail to Finweek that all members of Saru’s 13-member executive council “are non-executives with the exception of the CEO and CFO, who are full-time executives”.

That means the 107% bonus increase to R1,591 million for 2012 would have been split between Roux and Haddad. Fees for the rest of the executive council increased just six percent to R3,935 million, although their allowances for the year rose 18% to R295 197.

Finweek asked Saru in an e-mail to explain why the executive council was rewarded so handsomely, despite the fact that profits had slumped.

The following response was received from Colquhoun: “The 2011 profit was abnormally high, and well above budget, due to significant cost savings achieved following the cancellation or deferment of projects which were not aligned to Saru’s new strategic direction …

“Saru uses a recognised grading system for all staff, including senior executives, and salary levels are set using appropriate national salary surveys as a benchmark.

“Where necessary, the services of independent remuneration consultants are utilised. Saru’s HR and remuneration committee, whose members are all independent, recommends and the council approves all salary increases, which are market-related.

“Saru’s senior executives participate in a performance bonus scheme, also recommended by the committee and approved by the executive council.

“Various performance objectives with very clear deliverables and outputs [including financial control], are set and strictly assessed each year to determine performance bonuses.”

Page 41 of Saru’s annual report also suggests that a big reason for the union’s drop in profitability last year was the 20% increase in operating expenses.

The breakdown of this rise in operational costs is described in the annual report as “costs associated with hosting the SA versus New Zealand Test match at FNB Stadium and the IRB Junior World Cup [six percent]; national teams [four percent]; development of the game [four percent] and staffing costs [three percent]”.

Finweek asked Saru for more clarity on why the cost of the Test match between SA and New Zealand at FNB Stadium had been singled out from other Test matches, however, no reply was received at the time of going to print.

One of the biggest increases in Saru’s expenses appears to be its overall salary bill. According to page 73 of the union’s 2012 annual report, the total salary bill for all staff increased 40% to R52,129 million for the year ended December 31, 2012, from R37,262 million the previous year.

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