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Exxaro workers feel they do not benefit from the company's success

By unknown | Jul 06, 2007 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

Executives are seeing the benefits of an economic boom in their salaries, so why shouldn't their workers?

Trade union Solidarity attached a spreadsheet to its press release yesterday to explain why coal miners employed by Exxaro are threatening to strike over their employer's final wage increase offer of 8percent.

According to Solidarity's data, the basic salary of Exxaro chief executive Con Fauconnier grew 375 percent and his performance bonus rocketed 4185 percent between 2003 and last year.

"Exxaro workers do not expect the same exorbitant remuneration that is paid to its chief executive. Fauconnier is apparently only concerned with his own bank balance and that of the shareholders. Workers feel that Fauconnier and his management skim off both the milk and the cream, leaving the workers struggling to survive," said Solidarity spokesman Reint Dykema.

"Are workers right or wrong?" Sanlam group economist Jac Laubscher asked in a report yesterday.

In 2003 employees received slightly more than half (51,2 percent) of national income. This fell to 49,4 percent last year.

The pie has grown - the past four years have been a period of exceptional prosperity for the world, with the global economy growing at 5percent a year.

But the numbers indicate the benefits are not being shared fairly. Workers are being left behind in a flood of prosperity.

Commodity producers are reluctant to share their profits with employees when prices are high because this will leave them vulnerable when prices drop.

How should companies share the benefits of high commodity prices more equally? "To my mind the obvious way to do so is to increase that portion of workers' remuneration that varies according to the employer's financial position, rather than to increase the fixed component. For example, companies could pay their employees bonuses that depend on the size of the profit made by the company," said Laubscher.

"An increasing number of companies are also allocating shares in the business to their employees on all levels, so that they can also benefit from a rise in share prices just like any other shareholder."


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