• Tweet

 Remuneration generally of executives is quite high and does not contribute to bridging the inequality gaps between the highest paid and lowest paid 

RELATED ARTICLES

• It's just too much for Gigaba
• Samwu ready for pay talks
• HR dept messes up big-time
• Financial reports slam rot in system
• Cosatu wants state construction firms
• Students realise dreams
• IDC to issue green bond, divest shares

Matsietsi Mokholo, deputy director-general for legal services in the Department of Public Enterprises, told Parliament yesterday that the moratorium - which was put in place in 2009 pending a review of executive pay at state-owned companies - had not gone down well with executives and board members of these entities.

"Every single day the minister receives a request from state-owned companies, all of them, either being the boards or the executives and motivations for increases. The response is the same, the minister says we will not consider any increase up until this process is finalised," she said.

Mokholo said state-owned companies argued that the decision to bar them from increasing executives pay, incentives and board member fees was hampering their ability to attract qualified and highly skilled managers, especially from the private sector.

"We face a challenge from state-owned companies because they say the moratorium has been in place since 2009 and at every AGM they ask when are we finalising the review," she said.

Public Enterprises Minister Malusi Gigaba told Parliament's standing committee on public accounts last month the freezing of executives' pay increases at all state-owned entities under his department would be in place until a proper remuneration policy had been put in place.

"Remuneration generally of executives is quite high and does not contribute to bridging the inequality gaps between the highest paid and lowest paid," he said.

Mokholo yesterday presented a progress report on the work that had been done by the panel tasked with reviewing executives' pay so far. She said the panel had taken a provisional report containing a set of recommendations on the restructuring of executives' pay and incentives to cabinet.

Among its recommendations was a remodelling of short-term incentives such as once-off bonuses to link them to performance and abolishing long-term incentives for executive directors such as retention fees.

If the recommendations of the panel are accepted, the size and asset value of state-owned companies will not be accepted as a reason for paying executives at larger entities more than those of smaller state-owned companies.

The department was also concerned about state-owned companies bench-marking themselves against JSE-listed companies in terms of executive remuneration when their mandates are different from those of such companies.

Comments

• Sign in or sign up to comment

Sat May 25 03:52:27 SAST 2013 ::

Apr 25, 2012

maneater

Give Minister Gigaba a Bells, if these incompetent fat cats dont like it let them go to private enterprises and fail there. Eskom, Denel, Telkom, with the exception of transet they have all failed and neither deserve any increase.
Report Abuse

Apr 25, 2012

RobinH

I fully support the moratorium on the excessive salaries these appointed cousins award themselves, BUT I feel that our parliamentarians are quick to advocate such things whilst being even quicker to vote themselves bigger and bigger increases every year. To me the salaries (and the most unbelievable perks and privileges) that our parliamentarians command is virtually criminal.
Report Abuse

Apr 25, 2012

MommaC

We live in a freee world. They have to keep firmly in mind that the competent people are constantly being headhunted so the salaries in SA have got to be in line with those from other countries. They also have to keep in mind that having the head office in SA is very much a changeable decision for large corporations.
Report Abuse

Apr 25, 2012

Sinudeity

"a review of executive pay at state-owned companies - had not gone down well with executives and board members of these entities."

LOL
Report Abuse

Apr 25, 2012

Sinudeity

MommaC - If only the parastatals would hire said 'competent people', instead of these deployees.
Report Abuse

Apr 25, 2012

MommaC

Sinudeity

That, unfortunately, is the crux of the problem.
If you are prepared to pay for a Graham McKay or a Jeff Bezos, then at least get someone of that calibre.
Report Abuse

Apr 25, 2012

Sinudeity

MommaC - These dudes currently earn more money than most directors in South Africa.
Report Abuse

Apr 25, 2012

MommaC

Sinudeity

You get what you pay for.
Both of them also make most of their money from share profits. Makes for a good incentive to do the job right
Report Abuse

Apr 25, 2012

Sinudeity

MommaC - "You get what you pay for."

In that case, we are overpaying the dudes.
Report Abuse

Apr 25, 2012

MommaC

Sinudeity

If some of them were paying us, we'd still be getting short changed :(
Report Abuse

Read all 18 comments