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Gigaba roasts high CEO salaries

May 14 2017 06:08
Dewald van Rensburg

Finance Minister Malusi Gigaba on Friday advocated more “realistic” incentives for the executives of state-owned companies that are “sensitive to the expectations of the public”.

He was speaking at a meeting with Business Unity SA, which he attended with his deputy, Sfiso Buthelezi.

The meetings signal the normalisation of relations between organised business and Treasury after the removal of Pravin Gordhan as finance minister.

A video recording of part of Gigaba’s address at the meeting was released afterwards, showing the minister calling for “strategic partnerships” with the private sector and better governance at state-owned companies.

Gigaba said he was “surprised by the decision of the board of Eskom” and that he would like to see Public Enterprises Minister Lynne Brown’s response to it.

After the morning meeting with Business Unity SA, Brown held a media conference and endorsed the Eskom board’s reappointment of Brian Molefe as CEO.

Gigaba then hit out at the high salaries and incentives given to executives at public entities, a seeming reference to the controversial R30 million golden handshake Molefe was set to receive before it got blocked by Brown.

“When I was in the same portfolio I used to raise the issue that the long-term and short-term incentives are misaligned and quite exorbitant,” Gigaba said.

He had been minister of public enterprises previously.

Benchmarked

“You can understand when they come to us and say that they must compete with the private sector for the same skills ... We admit all of that.

"But if you say that the president should get paid more than anyone ... that argument falls flat on its face.

“If you said that the minister of public enterprises must be benchmarked against the highest-paid CEOs in state-owned companies because she is the boss of all of them, that falls on its face,” said Gigaba.

“The CEOs of state-owned companies must also be paid at benchmarked salaries and their incentives must be realistic and sensitive to the level of the economy and the expectations of the public.”

Gigaba extolled the virtues of strategic partnerships, citing as an example government engagements with the automotive manufacturing sector in Port Elizabeth to transition its logistics from road to rail.

“Together with our Business Unity SA members from all sectors of the economy, we look forward to exploring the strategic partnerships that the minister referred to,” Business Unity SA CEO Tanya Cohen said in a media statement.

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