Johannesburg - Multi-million rand payments made to Telkom’s previously suspended chief financial officer Jacques Schindehütte has trade union Solidarity up in arms.
On Monday, Fin24 reported that top executives at Telkom have seen pay hikes at the company despite the telecommunication giant’s ‘turnaround’ plan which involves cutting over 4 000 jobs and outsourcing another approximately 3 000 employees.
According to Telkom’s 2015 integrated report, total remuneration for chief executive Sipho Maseko jumped from R11.7m in 2014 to R12.3m in 2015. The report also indicated that Telkom’s current chief financial officer (CFO) Deon Fredericks received total remuneration of R8.6m.
READ: Here's what Telkom bosses get paid
However, it is a payment of R18.7m to Telkom’s former CFO Jacque Schindehütte for the period ending March 2015 that has prompted questions.
Schindehütte was suspended from Telkom in October 2013 and then retired in August 2014. Reasons for Schindehütte’s suspension have never been revealed by Telkom while a disciplinary process brought against him was reportedly abandoned.
Schindehütte also previously denied that a R6m loan granted to him by Telkom was a key reason for his suspension. Schindehütte used the loan to buy shares in Telkom.
“Solidarity believes that Telkom could have paid the salaries of about 80 technicians for a year with the money paid to its suspended former chief financial officer, Jacques Schindehütte,” said the trade union in a statement on Tuesday.
Solidarity’s head of communications industry, Marius Croucamp, said the average technician employed by Telkom is said to earn about R20 000 per month before deductions.
“Given the massive retrenchment process at Telkom, we are aggrieved that Telkom has squandered so much money that could have been used to keep experts in its employ. At meetings with Telkom we will once again warn the company to get its priorities right and to have its employees’ interests at heart,” Croucamp said in the statement.
Telkom responds
Telkom’s 2015 integrated report explains that Schindehütte received a short term incentive payment of R1.2m for the 2014 financial year while his long term incentive payments for both 2014 and 2015 amounted to R10.3m.
The report also said that Schindehütte earned payment for 25 accrued leave days of R656 181.
But the company has also further explained payments made to Schindehütte in an email to Fin24 on Tuesday.
“Mr. Schindehütte took early retirement prior to the finalisation of the internal disciplinary process that had been initiated related to personal misconduct,” Telkom’s managing executive for group communications and public relations, Jacqui O’Sullivan, told Fin24.
“The long term incentive payments made to him were in line with the employment contract he had agreed to with Telkom. The terms of this contract, he was paid out the cash equivalent, since the agreement pre-dated the share scheme,” said O’Sullivan.
O’Sullivan further explained Telkom’s approach to remuneration.
“Telkom uses market and industry benchmarks to ensure employees are remunerated competitively. This is necessary in a highly competitive industry, such as the telecommunication sector, where the growing number of competitors result in fierce competition between companies, to secure the best talent in the country,” she told Fin24.