In the course of less than two years at cement producer PPC, the former chief executive racked up enough money to live in luxury for the rest of his life, write Marcia Klein and Mamello Masote
Ketso Gordhan, the former CEO of PPC who took a R1?million salary cut to close the wage gap between himself and his employees, was actually paid R21.7?million in his last year at the cement producer.
Gordhan, who made a well-publicised salary sacrifice and encouraged 60 of his fellow executives to do the same, resigned in September.
He walked away with a basic salary of R4.4?million, leave pay of almost R600?000, notice pay/restraint of trade of R5?million, a further restraint of trade of R5?million, and R6.1?million from share awards granted under a forfeitable share plan and the Masakhane Employee Share Trust, a trust set up to empower PPC employees.
Tryphosa Ramano, the financial director Gordhan tried to get rid of and who did not opt for the salary sacrifice, was paid R9.5?million in the last financial year.
This included a salary of R2.9?million, with the rest made up of perks, bonuses and incentives.
Gordhan’s famous R1?million pay cut was presumably taken on his basic salary. But his basic salary was R4.9?million last year and R4.4?million this year, so it is unclear where the R1?million cut is reflected.
Nevertheless, his salary sacrifice is largely irrelevant in terms of his overall pay package, which includes a number of payments that are arguably not required in the case of a resignation.
An announcement in March revealed that Gordhan was awarded R7?million worth of shares in terms of the forfeitable share plan, but these will only vest in 2017 and will be subject to performance.
This is a typical long-term incentive, but it appears some of these shares were paid out to him anyway.
Gordhan said he took the pay cut to close the wage gap between top- earning executives and lower-paid workers. He said the sacrifice made by top executives would result in lower-paid PPC workers getting R10?000 more a year.
The workers might be getting more, but the wage gap, in the case of Gordhan at least, has increased substantially.
In the course of less than two years’ work at PPC, he has racked up enough money to live in luxury for the rest of his life. In the previous financial year, Gordhan was paid R8.4?million, which included a basic salary of R4.9?million and an incentive bonus of R2.8?million.
This, with his 2014 windfall, brings the total for his 20 months at the company to more than R30?million.
When contacted for comment on Friday, Gordhan said: “My salary when I started was R6 million. I cut it to R5 million and took no increases.”
Attempts to get a hold of Sibiya were unsuccessful, and his phone went straight to voicemail when called. Text messages were not answered.
Gordhan left PPC just before the September year-end after a battle with the board. He resigned suddenly when the board would not sanction his intention to get rid of Ramano.
He retracted his resignation, but the board did not accept it. Since then, Gordhan has campaigned to get his job back and three shareholders called for a special meeting to overhaul the board, which is headed by Bheki Sibiya.
After some consultation, the special meeting was cancelled, but PPC agreed to implement some of the shareholders’ suggestions.
Despite the compromise, Gordhan did not get his job back and was recently replaced by Darryl Castle.
Shareholders will meet late next month to vote on a new board.
The list of nominees has been something of a moving target since the three shareholders nominated a new board a few months ago.
The proposed new board now includes former Reserve Bank governor Tito Mboweni and Advocate Mojanku Gumbi, among others.
No sooner had the announcement been made this week than Claudia Manning withdrew her nomination.
She follows Bobby Godsell, Itumeleng Dlamini and Nompumelelo Siswana, who had been nominated with Gordhan and others by the three shareholders.
Sibiya, the executive chairman who took over in an acting capacity when Gordhan resigned, said he would not stand for nomination and would step down once a new board and executive were chosen.