MPs: Curb CEO salaries

Nov 08 2012 17:38
Parliament - The level of CEO remuneration in the private and public sector is sending out the wrong message to the average worker, Cope MP Nick Koornhof said on Thursday.

"We can't ignore what is happening in certain sectors which border on poor board decisions and greed," he told the National Assembly in a debate on high salaries in the private sector.

The Congress of the People MP said the huge gap between the rich and poor meant the country should condemn the exorbitant salaries paid to CEOs of private companies and state-owned enterprises.

Despite the economic downturn in 2008, CEOs were still able to double their earnings.

"In 2009, the average salary of a CEO was R4.8m... that is 36 times more than the average worker," he said.

Koornhof said this was setting a dangerous precedent and would affect the wage demands in various sectors.

"Let's tone down expectations, for the sake of the survival of this country."

ANC MP Gloria Borman welcomed the debate.

"Salaries are in fact quite obscene... the 15 highest paid directors of JSE-listed companies earned R622m last year," she said.

In comparison the top 15 earners of state-owned enterprises earned only R107m, less than R7m each on average.

The Democratic Alliance used the debate to reject various proposals including increasing Value Added Tax (VAT), placing a wage cap on high income earners and a super-tax for the rich.

"International experience indicates that luxury-goods focused VAT is too costly and complex to administer," said DA MP Wilmot James.

He said wage caps on high-income earners had failed in other countries who tried to implement this.

Instead, James suggested a list of DA proposals.

This included giving shareholders more say on the remuneration policy for executives.

"Shareholders must heighten their interest in and influence over remuneration by using critical performance information to exert pressure on corporate board remuneration policies and exit payments."
remuneration  |  mps  |  ceos



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Have you experience a sudden depletion in data before?

Previous results · Suggest a vote