Mantashe takes swipe at top brass pay

Johannesburg – "Bloated" executive remuneration becoming the norm is not good for a developing economy with high inequality levels like those of South Africa, African National Congress secretary general Gwede Mantashe said on Tuesday.  

"Inequality is the problem in this country and these high executive are also not helping," said Mantashe, speaking at a FinMedia24 breakfast in Sandton. He was responding to a question on whether trade union demands were damaging the country's economy.

Trade unions recently negotiated an increase above the inflation rate as well as substantially improved housing subsidies for workers at power utility Eskom.

However, Eskom's own executives have also been recently awarded average salary hikes of 25% for the 2010 financial year. That was more than five times the prevailing inflation rate of 4.6%.

"Trade unions can only be as powerful as the counter-weight," said Mantashe. He said the results of bargaining forums - like the 11% wage increases awarded at transport utility Transnet earlier this year - do not reflect economic reality. "Companies must strengthen their negotiating teams," said Mantashe.

Good bargaining teams like those at Eskom, said Mantashe, were able to produce an economically palatable agreement in an orderly fashion. "Nobody trashed or damaged anything [at Eskom] because the negotiating teams were strong," said Mantashe. He added that worker attitudes were also hardened by arrogant employer negotiators.

Mantashe added that the correct medium for deciding worker salary levels was bargaining forums consisting of employers and labour, while company boards were appropriate for executives. "Otherwise the government would welcome the opportunity to dictate salaries," said Mantashe.

 - Fin24.com