Fin24

Rein in bonuses, Gigaba asks

2012-06-17 10:40

Pretoria – Go slow on management bonuses!

This was Public Enterprises Minister Malusi Gigaba’s message to Eskom on Friday.

Total remuneration of the parastatal’s board and management team last year amounted to a full R54m.

Zola Tsotsi, who chairs the Eskom board, in responding to a question at the announcement of the electricity giant’s financial and operating results on Thursday, confirmed that provision had again been made for management bonuses “based on Eskom’s performance”.

He did not provide any details.

Strong reaction was previously elicited by the awarding of hefty bonuses to Eskom’s top management while consumers were experiencing sharp electricity tariff hikes and large businesses were being rewarded for suspending production so as to relieve pressure on the electricity supply.

Gigaba answered other questions and then referred back to the issue of bonuses. He said the shareholder (government) was unhappy about the bonuses.

Gigaba said government had asked everyone to scale down and it would sent the right message if the proper decision was taken.

His department had appointed a consultant to develop new remuneration guidelines for all state-controlled companies.

He asked for a disciplined approach to remuneration and bonuses in light of the country’s huge inequalities. 

Remuneration is important in motivating people and rewarding performance, but sensitivity toward the poor needed to be demonstrated, he said.

According to Eskom’s integrated annual report, senior management’s remuneration is linked to Eskom’s performance and the contribution made by a specific individual.

Senior management’s basic salaries are supplemented by short- and long-term incentives.

Remuneration packages are put together line with local and international yardsticks, while keeping the shareholder’s guidelines in mind. The board approves the packages for the financial director and executive directors, but the shareholder has the final say regarding that for the chief executive, Brian Dames.

In the financial year to March 31 the management team’s salary increases were on average below the inflation rate.

Dames’s total package in the financial year was almost R8.3m, compared with R7.5m the year before. Paul O’Flaherty, the financial director, received almost R5.5m, compared with almost R5m the previous year.

The other eight members of Eskom’s executive team together earned around R34m, compared with R29m in the previous financial year.

 - Sake24

For more business news in Afrikaans, go to Sake24.com.

 

Comments
  • Bless Boswell - 2012-06-17 11:03

    In business in general workers have sometimes not even received bonuses. They have also had to pay raised Eskom rates. In Eskom however, they get to receive bonuses and increase the rates. I smell a great big fat rat.

      mlucejko - 2012-06-17 11:19

      When it comes to paying remuneration and bonuses throughout ALL the parastatals, the business model is totally 'warped'.. Senior managerial positions award themselves pay increases of at least 20% -25% and bonuses double their annual pay, while the average 'blue collar worker' has to fight and battle to get a measly 6% - 8% !! This is causing huge resentment with the working class in this country !!

  • braamc - 2012-06-17 11:05

    It is certainly not from performance, we are paying 4x the inflation rate increases annually to have your balance sheet looking this way.

      benn.sadie - 2012-06-17 11:56

      Bonuses? This is wanton theft and plunder. Eskoms debt has just increased to R350 Billion. What will the consequences be when, not if the Rand weakens or more likely collapses? If the Rand looses half of its value against the dollar, effectively, the debt burden doubles. And the collapse is coming- guaranteed.

      louise.cook.127 - 2012-06-17 16:59

      Dames likes to justify his bonus on the grounds that there have been no blackouts since his term; of course not, the idiot wants claim credit for something he achieves ONLY by limiting supply to industry and thereby preventing SA from achieving the required growth rate it needs. Dames and the rest should get NO bunus until SA has enough power - green or otherwise. Eskom was warned about coal supplies but chose to fire the US consultant who pointed out the problem.

  • yar.wellnofine - 2012-06-17 11:07

    Mismanagement team I Vote - No to bonuses. As an electricity consumer, I assume the rights of shareholder.

  • muhammed.smith.161 - 2012-06-17 11:59

    his name "Tsotsi" says it all

  • Gavin - 2012-06-17 12:49

    why do you think nothing has been maintained - trash like those that head up our parastatls - have been digging deep into the coffers and living the high life. The new SA is about me, not you.

  • Ted - 2012-06-17 12:51

    The 'performance' that matters to me is the delivery of reasonably priced electricity 24/7. Nothing else measures Eskom's performance. An increase in revenues coz of a rate hike can not be deemed performance by a monopoly enterprise. If you look at the reasons given for the rate hike in the first instance viz the financials tabulated; then you can see how these crooks duped and shortchanged the public.

  • Sekwati - 2012-06-17 12:53

    so the increased electricity tariffs is the result of this bonuses hmmmmmm wow...seems like everybody is ripping us off...who's supposed to protect us?....lets bring in the united nation because our unions are busy with porn deals...

  • kent.harding.9 - 2012-06-17 12:57

    What a pity we cant all produce our own power and put these greedy extorters in there place.. Cause thats wat it is. Extortion. They could double the price of power nd we'd stil hav2 pay it.

  • Ian - 2012-06-17 13:04

    IT'S NOT THE SALARY, BUT THE AMOUNT OF BONUS THAT'S WORRYING

  • Cassandra Eileen Olivier - 2012-06-17 13:30

    What a pity we don't all get there bonuses

  • Zahir - 2012-06-17 13:43

    The big issue is that eskom is a monopoly they can do what they like without checks

  • patsy.smith.125 - 2012-06-17 14:12

    Disgusting how greedy some people are.... Gimme, gimme, gimme. more and more - more than can be spent in a lifetime. More that could be spent to alleviate the misery some people suffer. Absolutely horrifying!

  • vasee.pillay - 2012-06-18 10:15

    wow? it's about time the issue of bonuses be adressed in parastatls.How can Escom say because of performance they deserve large bonuses. If you ask for unrealistic increases,obviously you would show a huge profit with no effort put in. Do not claim that you worked so hard that you achieved a profit which was tantamount to stealing from the public in order to achieve this. With regard to bonuses the government needs to give all its management teams in parastatals the same bonuses the workers get on the shop floor i.e one months salary as they get a huge monthly salary. If they dont like it "piss off". The extra paid in bonuses can be used to help the poor and all monies gained through corruption should be accumulated in a fund called the poor and help them. These people who earn exhorbitant salaries should actually not get a bonus as all parartatals are "parasites" who lived off the public purse. They cannot claim for large bonuses and if they do fire them and replace them with people who would work for less. A lot of people are waiting for jobs who would do a better piece of work than their prececessors.

  • pages:
  • 1