Fin24

Eskom doubles execs' salaries

2011-06-27 22:13

Johannesburg - State-owned power utility Eskom paid executive committee members 109% more than they were paid last year, according to its financial statements for the year ended March 31.

Eskom's directors' remuneration report reveals that R18.5m was paid to executive committee members, compared to last year's R8.8m. The biggest winner was human resources head Bhabhalazi Bulunga, who pocketed 507% more at R3m, compared to last year's R501 000.

Of the two executive directors, CEO Brian Dames was the highest paid at R5.7m, a 0.9% increase. However, finance director Paul O'Flaherty took home 346% more at R4.9m.

Releasing the group's financial results on Monday, Dames said his management had agreed not to take any bonuses if they could not keep the lights on or achieve targeted savings.

This was despite a public outcry over the pay and bonuses of state-owned enterprise executives, sparked by a high court claim filed by former Eskom CEO Jacob Maroga for R85m, which he said he would have earned had his contract not been terminated prematurely.

Former Public Enterprises Minister Barbara Hogan set up a panel, led by former ambassador Barbara Masekela, to review the remuneration of senior management and non-executive directors at state-owned enterprises. Current minister Malusi Gigaba said in February that the report would be released to the public soon, but this has not yet happened. 

After Eskom was granted an annual increase in power tariffs of around 25%  for three years, the utility confirmed on Monday that it will likely apply for two more hikes in this range.

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Eskom reported a net profit of R8.4bn for the year.

Eskom said the latest profit was made on revenue of R91.4bn, an increase of 29% from 2010. In 2010, Eskom made a net profit of R3.6bn.
 
The past two years of profit have been a remarkable turnaround for a company that made a loss of R9.6bn in the 2009 financial year.

Dames said the revenue growth was driven by tariff increases and that the profit had been reinvested in Eskom.

"We cannot continue successfully with our massive build programme if we are not as profitable as this. The total interest repayments on our debt that we have incurred for our build programme is still exceeding net profit," he said.

Eskom has a capital expenditure programme of R450bn, and interest and debt repayments in the 2011 financial year were about R18bn.

"Eskom is well on track to be financially sustainable. That is driven extensively by the fact that we now have tariffs moving towards cost-reflective rates ... allowing us to invest back into the business," said Dames.

Eskom was granted an annual increase in power tariffs of around 25%  for three years and is likely to apply for two more hikes in this range.

Cash-strapped Eskom has been struggling to raise all the R450bn it needs to build new power plants over the next six years to avoid a repeat of a crisis which forced mines and smelters to shut for days in early 2008 and cost South Africa billions in lost output.

Dames said Eskom had secured more than 70% of its funding requirements, and hoped to find the remainder in the course of the current financial year. He said the utility was on track to add another 12 000 MW to the grid by 2019, which should temporarily relieve tight supplies in the world’s top producer of platinum.

Comments
  • brok3news - 2011-06-27 22:18

    In your face Greenpeace! lol

      Arno von Helden - 2011-06-28 08:28

      lol

  • Makutu - 2011-06-27 22:20

    Cost effective rates...? Cost effective for Eskom but not for the common man on the ground! This is seriously pathetic!

  • tdk25 - 2011-06-27 22:22

    And today and yesterday I had not electricity in my house.....To say that this country is going backwards is an understatement

  • wernervanaswegen - 2011-06-27 22:23

    Oh for crying out load! I think it's time we dump 5 tons of excrement in front of Mega-Twat park. Really. They need to hike the price of electricity because there isn't enough money but then they go ahead and pay a single person R5.7mil. Based on what? Performance!FFS!!!

  • Hennie - 2011-06-27 22:23

    lol.....guess they need the increases to pay their electricity bills :P

  • Mad Dog - 2011-06-27 22:27

    This is disgraceful!

  • Pencilgraffiti - 2011-06-27 22:29

    What the F@c$ is up with this... We are paying RIDICULOUS RATES for power, living in a recession and these bastards are walking away with millions every months - This is Unacceptable!

      mike881 - 2011-06-28 08:45

      The frustating part is that the consumer cannot do a thing about it as they are the only supplier. Sure we can take measures to reduce consumption - but it does not alter the fact that we are paying excessive tariffs for the benefit of an elite few.

      Wanda - 2011-06-28 09:02

      Disgusted my reading on my electricity acct is from the 11/04/2011 to 11/05/2011 amount R1754.88 plus vat R245.68 total R2000.56 and thats just electricity. Food prices go up every month how the hell are we supposed to live, now we are going to pay to travel on highways as well, when is it ever going to end.....

  • Francois - 2011-06-27 22:29

    Yet, the electricity price has to increase because there's not enough money to pay for upgrades to the actual electricity grid...

      Gen - 2011-06-27 23:04

      Now you know why.

  • kingrob - 2011-06-27 22:31

    I want to vomit when I read stories like this. It seems everyone is just trying to line their pockets and dont give a rat's ass about the people suffering.

  • Spinnie - 2011-06-27 22:31

    Thank you for the hard work... you guys deserve it. Life is good in SA..... clowns.

  • gcr - 2011-06-27 22:31

    These salaries are out and out robbery - none of the parties has done anything exceptional to warrant these salaries; they admit that ijncreased revenue came from tariff hikes. When will government bring in performance appraisals - these peoples salaries should in reality be sanctioned by the electricity paying residents/companies of this country not some remunerations committee

      BigD - 2011-06-28 06:35

      Too true. Now they want performance bonus's. What performance, the profit was made from price hikes. Now again we are gong to pay another 22% for electricity in Johannesburg. Public salaries aare now getting out of control. They are way higher than private sector.

  • Dana - 2011-06-27 22:34

    I wish I could say I was surprised... but those of us actually paying for electricity knew that this was coming. Typical... "we need more money to keep the lights on" and when they get it the first place they put it is in their own back pockets

  • Ivym - 2011-06-27 22:35

    Downright criminal. No wonder the infrastructure is stuffed and load shedding is the order of the day. On top if it all they have a cheek to increase electricity. Extortion at its best.

  • Amani - 2011-06-27 22:44

    This is what happens when there are no shareholders to object (I'm looking at you Malema). Que the Union demands when they catch wind of this.

  • jock - 2011-06-27 22:45

    you better make money before it hits the fan.There is no way you people can earn such salaries while most of the countries population is suffering.It cant go on for much longer before we end up with a revolution

      OZNOB - 2011-06-27 23:00

      Barretry

      Dan - 2011-06-28 05:52

      True, some countries are cutting back on salaries even. South Africa on the other hand continues to rape its own economy. ViVa ANC ViVa!!!!

  • Dada - 2011-06-27 22:46

    lol... I see cosatu asking for 20% pay hike. They are just waiting for winter to clear, after winter it's all systems go for the 20% pay hike strike!!!.

      Schmieglie - 2011-06-28 07:19

      In fact, I see Cosatu asking for 300% pay hikes. It will be the management's own fault.

  • Grimmy - 2011-06-27 22:47

    I have just ONE question, how do they get away with this? The news report it, nothing happens and next year they shock us AGAIN with the same story just double the salary AGAIN!!!

      OZNOB - 2011-06-27 22:58

      Let us say thay they are rewarding incompetance. yippee y yay. if anything they should be taking decreases in their salaries for allowing mothballed power statios go to rack and ruin before realising that they needed those stations. quite a few years ago we had surplus of power and now we have a power deficit - these people should be held accountable for this gross negligence

      OZNOB - 2011-06-27 22:59

      ONE WORD DESCRIBES IT ALL - BARATRY

      Azazel - 2011-06-28 01:19

      ever see that movie the Planet of the Apes?....then you will understand why they get away with it.

      anti crime - 2011-06-28 06:40

      Hey man this has to stop, now we pay through our butts for power AND we sustain the guys that use free power...stuff this.

  • Wishbone - 2011-06-27 22:47

    The looting continues! Aloota continua! How can an HR bloke go from R500k to 3 bar?

      OZNOB - 2011-06-27 23:00

      QUITE EASILY IT APPEARS IF YOU WPRK FOR ESKOM

      Azazel - 2011-06-28 01:18

      Corruption wheel keep on turning....

      Frungy - 2011-06-28 04:01

      The finance guy took home almost as big an increase. I mean seriously how much effort does it take to use a spreadsheet? Given the massive HR problems in Eskom I think maybe the HR guy earned his pay (danger money for dealing with Union execs who'd like nothing better than to bury you in a shallow grave), but Finance? No risk.

      Dan - 2011-06-28 05:51

      Ask his friend boss. I think they call it Ubuntu - grab and run!

      Neef Gert - 2011-06-28 06:22

      Hopefully Malema will start with eskom first across the street of Alexandra, or is he also a tenderpreneur within eskom and also earning millions. Somebody's got to do something about this, maybe AFRIFORUM will do something about it?

      Creeky - 2011-06-28 06:45

      If this is what the Exec's get when they are PLEADING Bankruptcy..... I would HATE to know what they will be paying THEMSELVES when Eskom is FLUSH!!!!

  • R.Suppards - 2011-06-27 22:48

    These swine have no shame. Someone in authority PLEASE stop these aparatchiks raping the ordinary people of this so called democracy. ZUMA GET YOUR ACT TOGETHER,OR ARE THEY YOUR DISCIPLES???

  • hookah - 2011-06-27 22:51

    WHAT THE HELL?????

  • Die B@@$ - 2011-06-27 22:54

    So hulle het genoeg krag, wel ek gaan nou my fair share gebruik en as daar outages is, moet die Rsis maar explain. Ek spaar nie meer krag nie, want of ek R10 of R1000 gebruik, die network charge bly dieselfde. So geen nut daarin vir my nie. Ten minste gaan my huis warm wees die winter. BTW kan nie glo ek het 11 jaar vir hulle gewerk nie.

  • The Word - 2011-06-27 22:55

    109%, 507% im clearly in the wrong line of work. What?!!!!!

  • Leonard - 2011-06-27 22:56

    oce modratred means......

  • RuthK - 2011-06-27 23:00

    Disgusting! How many people could get electricity with that money! PIGS, you're worse than the Apartheid Goverment. you're nothing more than pirates that are looting public coffers. At least in the Apartheid days things were repaired and devloped. ANC SCUM!

      Charlie - 2011-06-28 09:13

      The moral decay in the ANC is sickening...how blind are 60% of this country??? What do they really expect voting for these corrupt clowns over and over again???

  • Motho - 2011-06-27 23:01

    Hopefully, ordinary employees will get similar increases!

  • adriaan - 2011-06-27 23:04

    A very small price to pay for the guys who secured the funding for Medupi, Medupi gave the ANC' s investment arm a nice 1 billion windfall, it would be nice to earn that kind of cash! Whether i can put my face so deep into zumas bum is another story

  • Steven - 2011-06-27 23:06

    TIA

  • jam - 2011-06-27 23:08

    while we common people work hard to pay these ridiculos tariffs for basic neccesities, these guys at the top take our money which could have been used for more food for our families as their luxury increases.

  • Nasdaq7 - 2011-06-27 23:08

    And they want to put everything under the government - go ahead. It will be a national disaster. But you know what COSATU - if millions lose their jobs and the ANC loses the election. You're out. Nationalize. The "evil whites" will flee and with them half of the world's money. Don't expect much from the UK and the rest of Europe, USA, Australia, New Zealand, Japan once you start grabbing - don't expect loans or investment - and don't be surprised if India and Brazil and China distance themselves from S Africa. They will invest in Nigeria and other African countries that show long term stability and economic growth.

  • Monica - 2011-06-27 23:11

    This is shocking! They complain that there is no funds to up-grade the power stations; then they get salaries that some people will not even earn in a life-time. The priorities of this country is wrong! Every one is out there to make a money out of someone for doing something! This is not normal bonuses; now the strikes will follow again! Then maybe no power this winter. I am sure these guys from Eskom has special electricity; will never be without lights! When the company had a loss; they still claim their bonus! This is outrages! You are a bunch of hipocrits and should not have a job at all!

  • jaccil - 2011-06-27 23:15

    Absolutely sickening. Reward the executives of an incompetent, mismanaged public service company at the expense of the entire country. Soon the majority of South Africans won't be able to afford food and, as Vavi predicted, we will have an uprising on our hands.

  • jam - 2011-06-27 23:16

    Increases in the cost of basic neccesities for us results in more for these guys. Lets salute them for jobs well done. Hooraah. Oops NO LIGHTS, another tariff increase for US and ANOTHER INCREASE FOR THEM.

  • John - 2011-06-27 23:24

    This here is one of the reasons the gap between rich and poor just continues to grow. If you get an inflation related increase, that is not an increase. You basically get more money, but you can do the same with it as the old salary. So, bottom feeders never get an increase and fat cats gets 9 times inflation increases. This is true for the Private Sector, Parastatals and Government alike.

      Dr Maximus - 2011-06-28 08:54

      Capitalism is failing because of the overspending of governments

  • yellow - 2011-06-27 23:25

    If Eskom execs are doing a good job, what would boards in the private sector, through head-hunting, offer them? Our economic system should be in question, not what eskom dishes out to keep their execs. We need more competent professionals to increase availability of exec-level material - especially with a professional and strategic management skills gap in the age range of 35 - 45. Most young professionals of the early naughties with pre-school or unborn children at the time fled the country. This, combined with the damage apartheid did to the development of professionals in the currently advantaged of the same age range, left the country begging. There's little labour competition in executive capability, pitching parastatals in a tough war for talent against the private sector. I agree, we should ask questions about these pay increases, but we should also make sure to be informed when we do. If Eskom falter under public pressure and appoints nobodies at lower remuneration, they may just as well give fish moths an opportunity to the chairs and carpets in the boardroom. Not a good idea.

  • thewestern - 2011-06-27 23:26

    And this is why I am leaving this rat infested country! I will rather pay tax to a government that uses it to the benefit of its citizens and not to pay over the top salaries and bonuses.

  • TheReal_BraDarkie - 2011-06-27 23:34

    This is really shocking! The employee costs were one of the weak areas even during Maroga's era. Now this is worse, this is daylight robbery. Of course if you can't interpret financial statements like some of our big mouth political leaders you won't understand.

  • 2WhiteStars - 2011-06-27 23:35

    Honest to God, there should be a law against this kind of thing. I know the private sector has different rules, but they are a quasi-Gov. institute, not so - funded in part by the State - and that means US.

  • Kenji - 2011-06-28 00:14

    This is Ridiculous! How can these execs earn so much when the prices of electricity is hiking so quickly, and people out there can't even pay their bills on time because of these devils in Eskom!? And how does a "state-owned" company get away with this.. We need everyone to stand up now, stop being so blind towards the government!!

  • Gentleman - 2011-06-28 00:18

    OMW!!!!! I guess its good to know our hard earned money is spent in such a way.

  • pierre.hough1 - 2011-06-28 00:53

    Give Escom to Julius Malema. He'll fix it!

  • Goddok - 2011-06-28 01:05

    This justifies my illegal connection. I want to vomit! What a fools paradise we live in!

  • maanda.mabidi - 2011-06-28 01:20

    These Executives are thieves and they claim that eskom does not have money. ANC must do something about this because the increament of their salaries can be divertet creat more jobs for poor people.

  • mymening - 2011-06-28 02:32

    WE simply cannot accept this. We are without any backbone? Greedy idiots.

  • Marcell - 2011-06-28 03:53

    Daai is 'n druppel in die emmer. Die klomp wat dag in en dag uit na hul skerms sit en staar kry ook baie vir wat hulle doen! In the end you get what you voted for.

  • photonic - 2011-06-28 04:52

    Why do you think Melanoma wants to nationalize everything? more for the ANC to milk!

  • sasam - 2011-06-28 05:07

    It must be said that Brian Dames is huge improvement over Jacob Maroga and that Brian had previously been solely responsible for the overhaul of Eskom's power station management. Maroga's prime concern was in giving hugely inflated contracts to BEE appointed contractors to transport coal to power stations. This fact brought him in direct conflict with Bobby Godsell. It is a well known fact in industry that senior management at the government parastatals are still generally political appointed dead wood weighing totally and completely on their work donkeys of middle management. They have no experience in their fields and their stay in their respective offices are so short lived that no substantial experience can be gathered. This goes along with an extreme lack of vision, direction and leadership in their various fields. It appears that their sole focus and input in life is in ensuring that BEE targets are exceeded and that their pockets are thickly lined for each brief visit in the various offices.

  • Pasi - 2011-06-28 05:29

    I want to puke.

  • Denise - 2011-06-28 05:32

    Eskom is obviously the Blue Train of gravy trains!!

  • corro51 - 2011-06-28 05:48

    Dear Mr Dames, How about you and your management team donate at least 20 % of your hard earned increases to help fund the remaining 30 % shortfall ? Or is that not an option ?

      DAMN - 2011-06-28 13:56

      Dear Mr Dames It currently costs R10.50 per day to feed a child! and since 83 % of children in the Limpopo province live below the poverty line, with some good will you would be able to have a great influence by feeding 2000 starving children in Limpopo for an entire year!!!

  • Krolie - 2011-06-28 06:01

    "...they hoped to find the remainder in the course of the current financial year..."? Well yeah, they will. They are hiking the tariffs ONCE AGAIN, and WE have to pay through our necks for elelctricity which has now become THE luxury item in our monthly budget. Shame on you Escom. We have to pay more and more whilst your Directors etc take a whopping salary back home! Those increases could have been used more wisely instead of expecting us to foot the bill.