State help to limit executive pay

Johannesburg - Distressed companies seeking state support will have to comply with stringent conditions, including a limit on executive remuneration.

Briefing the media as part of cabinet's economic cluster, Minister of Economic Development Ebrahim Patel said the Industrial Development Corporation (IDC) was on target to dispense funding support for private companies in distress to the tune of R1bn.

But, he said, it was critical for government to attach conditions to such support.

Companies that benefit from government support, Patel said, would have to commit to some form of job saving or creation. According to him, IDC support has so far saved 7 700 work opportunities.

Another condition would be a review of executive pay, greater local content in production and a more effective "partnership" with labour.

Asked about a benchmark for executive remuneration reviews, Patel conceded it was not possible to establish a general rule.

The review would be down on a case-by-case basis, with the emphasis being on what value each company received for salaries and bonus packages paid to executives.

"We will try and improve the numbers of these supports but we have to ensure, for example, that there is a greater employment outcome for each unit of working capital spent," Patel said. "We want to be able to show what happens to government loans and also what impact they have had."

- Fin24.com