Parastatal pay disdains results

Johannesburg - Executive directors and senior managers at South Africa's three largest parastatals were paid salaries in excess of R550m in the three financial years to end-March 2009.

This translates into an average salary of R3.7m per year for the 50 directors and senior managers of logistics group Transnet, power utility Eskom and the Industrial Development Corporation (IDC).

Over the same period, total profits at these groups amounted to R26.7bn.

Eskom posted the worst performance. Despite this, its directors were the most highly paid.

Leading the pack was Transnet, with a total R245.6m salary bill for its 23 directors and senior managers in the three years. This amounts to an annual average of R3.6m per individual.

Eskom's salary bill was the most difficult to calculate, as it included bonuses awarded in the form of unlisted shares (valued internally from year to year).

The power utility's overall figure came in at R139m in the period, an average annual remuneration of R5.8m for its eight directors and senior managers.

The IDC paid its 20 directors (including those at subsidiary Foskor) and senior managers R170.6m over the three years. This means IDC executives received the least pay compared to their peers at Transnet and Eskom, with an average salary of R2.8m a year.

Transnet was accountable for R16bn of overall profit, while the IDC brought in R13.9bn for taxpayers. Eskom pitched in a mere R3.4bn, worsened by the R9.7bn loss it reported at the end of its 2009 financial year.

Performance bonuses awarded during most of the measured period significantly improved directors' pay, making their salaries balloon way above prevailing inflation rates.

Mixed fortunes for CEOs

During financial 2009, IDC CEO Geoff Qhena received a 42% increase, taking his package to R10.29m for the year. This was exactly in line with the group's profit growth, from R3.9bn in 2008 to R5.6bn in 2009.

Eskom's Jacob Maroga received a 26.7% salary increase in 2009, boosting his total package for the year to R4.9m. Together with the R681 446 bonus shares he received, Maroga's salary leapt 44% on his 2008 package. However, Eskom reported a record R9.7bn loss for the year to end-March, following a R168m loss in 2008.

Former Transnet CEO Maria Ramos was not as fortunate as her two peers. Her total remuneration fell by 52.3%, from R11.2m (R5.4m salary plus R5.8m bonus) to R5.3m. She received no bonus in the year to end-March 2009. During these two years, Transnet maintained the same profit (R4.5bn). However, it was significantly down on the R7bn profit of 2007.

- Fin24.com