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Johannesburg - Eskom employees have been warned in an internal e-mail circulated last week that their bonuses will be significantly less than last year.
The bonuses that will reward employees for their work for the financial year to March 31 2008, could be reduced by as much as 70% under certain circumstances.
This comes after a report presented to the National Energy Regulator stating that Eskom bosses earn up to 50% more than those at the average JSE-listed company.
Eskom employees' dissatisfaction about the possible cut in bonuses led to the executive management sending an e-mail to all employees to address their fears.
In the internal e-mail dated May 20 (Sake24 is in possession of a copy), management admits that the concerns and speculation of employees had led to the e-mail.
Drastic reduction
In the message, the group's management assured workers that they would receive bonuses, but warned that "because Eskom's financial performance was not on par with previous years, bonuses would vary".
According to Eskom's financial statements of 2007, executive committee members received a bonus of at least R10m.
The bonus was made up of 20m shares related to performance and 2m shares as part of a deferred bonus scheme. The shares were transferred to the executive management on March 31 2008.
Eskom's managing director, Jacob Maroga, has avoided the media's questions about bonuses but had earlier mentioned that bonuses for the executive committee was an "issue of leadership".
Criteria for bonuses
"The bonuses serve as motivation for the members of the executive committee to look at adding long-term value, "he said.
Eskom spokesperson Fanie Zulu, says that bonuses for the committee and employers are calculated in various ways.
"The executive committee's bonuses are determined and approved by the directors, while the bonuses of Eskom employees are regulated by pre-determined rules," Zulu said.
There are certain drivers that determine how bonuses are calculated. The first being the company's financial performance. This determines how much will be paid out in bonuses.
The second is technical and operating performance. This can influence bonus payouts by up to 50%. Lastly, Eskom's shareholder (government) can adjust the amount "by up to 20%".
Zulu says that Eskom employees were "already aware of the bonus regulations by the start of the year".
Sake24 reported earlier this year that Eskom is heading towards a projected operating loss of R1.4m for the year ending March 31 2008.
- Sake24