EXECUTIVE PAY TO BE 'CAPPED'
RESTRAINT on executive pay is one of four conditions the government has laid down to support companies struggling to weather the recession, Ebrahim Patel, Minister of Economic Development, said yesterday.
Patel said there would be no specific cap on salaries or bonuses, but negotiators would be able to recognise excess when they see it.
"In a particular company, if we see there is no relationship between executive remuneration and the underlying performance of the company, then that becomes a formal topic between the company and government," he said.
"This is public money. We've got to show it is being used appropriately and cannot be a source for financing inappropriate executive pay."
Patel said the Industrial Development Corporation had allocated R1billion by January, saving about 7700 jobs.
This was well below the target set by Geoffrey Qhena, the IDC chief executive, in June last year.
He said then the IDC had paid out R500million to seven companies, had another 25 ailing firms on the waiting list, and expected to allocate R3billion in support in that financial year and another R3billion by March 2011.
Patel said other conditions were that the rescue should protect or create jobs, that there should be a commitment to use local rather than imported materials, and that there should be a formalised partnership between the business and its staff.
Patel said the government had also agreed that Khula Enterprise Finance, a state agency supporting credit for small enterprises, should shift from guaranteeing debt to become a primary lender.
In a related statement, Naledi Pandor, the Minister of Science and Technology, said the government had set aside R26million to support companies in the foundry sector wishing to bid for contracts with Eskom and Transnet.