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- The row over the increase in the salary of Wesgro CEO Tim Harris reflects the scarcity of top talent in SA, says acting board chairperson Michael Spicer.
- The Wesgro board approved an increase of R427 000, making his salary R2.5 million.
- Since Harris started as CEO in March 2015, he and the Wesgro team have facilitated R20 billion worth of exports and R8 billion worth of film production for the Western Cape.
The row over the R427 000 increase in the salary of Wesgro CEO Tim Harris to R2.5 million, raises the question of the scarcity of top talent in South Africa and the premium that it affords in the market, according Michael Spicer, acting chairperson of the board of Wesgro - the official tourism, trade and investment promotion agency of the Western Cape.
He says the board took an in-principle decision to renew Harris's contract in August 2018, based on two job offers he had had at that time – one in the public sector and one in the private sector.
Spicer had to step in as acting chairperson when Professor Brian Figaji resigned earlier this week.
Fin24 previously reported that governance specialist and lawyer Judith February resigned as a director of Wesgro over what she felt was a "tone deaf" reaction of the board to the increase for Harris, given the current economic climate in the country and the fact that Wesgro is publicly funded.
Figaji later resigned, claiming undue interference by Western Cape Finance and Economic Opportunities MEC David Maynier.
According to Figaji, the Wesgro board had unanimously decided on 12 February, and in full legislative compliance, to reappoint Harris as CEO for a second and final five-year term due to his "stellar track record of delivery at Wesgro".
He said the board regarded the salary as market-related and representing value for money. Furthermore, in response to the Covid-19 health crisis and economic climate, Harris made an unsolicited offer of a 6% reduction in salary and a one-third reduction in bonus for the financial year 2020/21.
Figaji further pointed out that, based on their most recent annual reports, the CEOs of equivalent provincial agencies were, in the 2018/19 financial year, earning significantly more than Harris. At that time, the CEO of the Gauteng Growth and Development Agency was earning R3.3 million; the CEO of Trade & Investment Kwa-Zulu Natal R3.2 million; and the CEO of the Eastern Cape Development Corporation R2.8 million.
Harris exemplifies top talent
"The notion that this kind of top talent, which we believe Harris exemplifies, could not find a job in the private sector at this time, or find one at a salary above that pertaining to Wesgro, completely misunderstands the competitive market for top talent," says Spicer.
He says in full compliance with all governance requirements, the board comprehensively reviewed and answered questions raised at the special board meeting in March 2020, backed up with extensive benchmarking documentation subsequently furnished to Maynier.
Spicer said the board was engaged in ongoing discussions with Maynier relating to "appropriate governance relationships".
"We are open to constructive engagement but remain concerned at excessive ministerial interference which we believe could set a dangerous precedent for the future. The board is independent and is governed within the context of the Wesgro Act and PFMA (Public Financial Management Act) compliance," says Spicer.
The board is independent and inter alia, has the power to appoint the CEO and determine his remuneration and through him, that of the staff. The board accounts to Maynier for the performance of the agency and its alignment with the administration's strategic goals.
Achievements
Spicer says that under the leadership of Harris, who started as CEO in March 2015, investment in the Western Cape increased by 32% and international tourism increased by 16%. The Wesgro team also facilitated R20 billion worth of exports and R8 billion worth of film production during that period.
Since he started as CEO, Harris and his team facilitated R11 billion in committed investments relating to 4 628 jobs in the province. More than 200 trade promotion business agreements were facilitated, with an export value of R20 billion and relating to 3 354 jobs, and R1.5 billion in committed outward foreign direct investments were facilitated.
Over that five-year period, 126 tourism marketing activities were supported by Wesgro with an economic impact of R2.9 billion. Wesgro also compiled more than 100 research reports per year.
Furthermore, the agency launched two major global campaigns marketing Cape Town and the Western Cape, not only as a tourism, but also a business and investment, destination.
The Cape Town Air Access unit, an initiative started by Harris when he became CEO, managed to double the number of non-stop international flights to Cape Town in five years. The unit facilitated 19 new direct international flights to Cape Town and 23 route expansions.
Over the five-year period, Wesgro has incubated and spun out the Saldanha Bay Industrial Development Zone and it is currently incubating the Atlantis Special Economic Zone.
A dedicated unit to promote investment and exports in the rural districts of the Cape was established, and the management of Visit Knysna was taken over at the municipality's request.
Since the novel coronavirus pandemic started, many of Wesgro's activities have centred around lockdown-related assistance. A dedicated website it created was even featured in a World Bank report on best practice in Covid-19 response globally.
Wesgro also built a personal protective equipment marketplace in conjunction with FirstRand, which is helping more than 400 smaller clothing producers to supply masks and other products to big corporates.
Provincial oversight
DA Western Cape MPL Deidré Baartman has incidated that she will invite the Wesgro Board to account to the provincial legislature's Committee for Finance, Economic Development and Tourism. The purpose is to receive a briefing on the process for remuneration decisions by the board as well as factors taken into consideration.
She said she has already received a letter from the board to explain the reasons for approving the salary increase.
"As chairperson of the provincial committee, I am dedicated to ensuring transparency and accountability from the provincial government and its agencies," Baartman said in a statement.
In an earlier statement Baartman said the Public Finance Management Act enables Maynier to hold executive oversight of Wesgro, which is funded by the Western Cape government and the City of Cape Town. All provincial finance matters are subject to scrutiny of the standing committee at the provincial legislature.
"Transparency and accountability are two key pillars the committee stands firmly behind," said Baartman.
* This article was updated to include a subsequent statement from Baartman.
