Mboweni salary hike draws flak

Pretoria - Reserve Bank Governor Tito Mboweni earned R4.334m from the bank in the year to March 31 - 14% more than in the previous year.

According to the bank's annual report, which was published in the past week, this amount includes fringe, medical and retirement benefits.

When the report was announced Hans van der Merwe, a non-executive director of the bank, said that Mboweni and his deputies' salaries had risen an average 7% in the financial year under review.

Increases for employees in managerial positions had been about 9%, and the general increase 10%-odd, reported Bertus van Zyl, executive general manager for the bank's central services. "Our employees are also union members," Van der Merwe pointed out. "It's important for the bank to have the best and most competent people in its service. The market dictates remuneration levels for such specialised employees in the banking sector."

According to Reserve Bank deputy president Daniel Mminele, increases are granted based on the bank's remuneration policy and its agreements with unions.

"The Reserve Bank's remuneration policy does not stipulate that salaries must be linked to inflation. It stipulates that they should be linked to general South African market movements."

Dr Roelof Botha, an economic adviser to PricewaterhouseCoopers, does not agree with these levels of increase. "In the private sector increases exceeding consumer price inflation (CPI) may be justified if the company's productivity increases.

"If institutions like the Reserve Bank and the South African Revenue Service (Sars) - which have no effect on the country's productivity and add no value to the economy - award salary increases higher than the CPI, they violate their own principles."

In the past Mboweni has on several occasions criticised large salary increases and said that these contribute to inflationary pressure.

But Van der Merwe says salary negotiations for the year to end-March were done before the downturn in the national and global economy.

The bank's total expenditure on staff costs was R991.9m for the year to end-March. This was 11.6% more than budgeted for.

According to the bank's annual report this was because the staff's accumulated leave exceeded budget, post-retirement medical benefits were higher because of changes to medical inflation, and more overtime was paid than budgeted for because of additional projects undertaken during the year.

- Sake24.com

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