Eskom executive pay up 25%

Johannesburg - Executive remuneration details published in electricity supplier Eskom's latest annual report are set to make things difficult for the company in its wage negotiations with trade unions, which have threatened an illegal strike from next week.

The remuneration report shows that in the year to end-March Eskom paid its six executive directors and executive committee members 25% more cash than it did the previous year. The executive salary bill went up to R20m, against R16m in 2009.

Included in that was R4.7m paid to former CEO Jacob Maroga for the seven months he remained in Eskom's employ before his disputed resignation in October 2009. This encompassed a short-term bonus of R1.2m, paid after the termination of his contract in December. Maroga received a total R4.9m for the whole of 2009.

Union attitudes will probably be hardened by the fact that the remaining four executive committee members received an average 59% cash increase on their 2009 salaries. The R14.5m total received included short-term bonuses totalling R5.3m, which were awarded for delivering both targeted savings in 2009 and for the R3.6bn profit in 2010.

Newly-appointed CEO Brian Dames received the highest increase, at 91% of his 2009 total salary. While nobody was paid a cash bonus in 2009, Dames received a R2.1m cash bonus in financial 2010.

Bonuses for targets met over 3 years

He took home a total R5.9m for his position as chief of the generation business, responsible for maintaining adequate coal stockpiles and uninterrupted electricity supply.

Eskom has continually boasted of not having had a single load-shedding event since April 2008.

The remaining executive committee members, Erica Johnson and Steve Lennon, received 82% and 73% hikes to make up total packages of R4.6m (R2.5m in 2008) and R3.7m (R2.1m).

In addition to the cash payments, the executives received bonus shares with a combined value of R8.1m. Those were shares granted to them in March for achieving targets set over the past three years.

Asked at a press conference about the increases, Dames said the salaries were determined by the board according to set policies that were satisfied. None of the executives at the time were board members.

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

The question was whether it was fair to offer labour an 8.5% salary increase and R1 000 monthly housing allowance, relative to management's increases.

Dames explained that the bonuses were paid for work carried out over the past few years. He also detailed how Eskom pays a total of R200m towards the housing needs of its employees.

 - Fin24.com
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