Sep 18, 2012
Govt considers capping salaries of State company execsBack
Denel|Eskom|Public Enterprises|Transnet|Service|Kenneth Sinclair|Malusi Gigaba|Tshediso Matona
© Reuse this
A moratorium had been placed on increases until the new ‘Remuneration Standards’ had been adopted.
Responding to a Parliamentary question posed by Kenneth Sinclair of the Congress of the People, Public Enterprises Minister Malusi Gigaba indicated that his department was in the final stages of developing new standards for SoC executive and nonexecutive directors.
Once adopted, these standards would be “enforced on the SoC with no deviation”, with implementation anticipated during the current financial year.
The DPE has direct shareholder oversight for eight SoCs, including large entities such as Eskom, Transnet and Denel, and their financial years begin in April and conclude at the end of March.
“It is important that changes to existing remuneration policies be phased-in with the transition taking account of existing employment contracts,” Gigaba said.
The standards would be informed by a set of guiding principles that would be “rational, transparent and require consistent application” and they will seek to strike a balance between the State’s national objectives and the company’s commercial imperatives.
Future packages would be based on issues such as economic impact and the company’s funding model and performance would be measured and aligned to the shareholder’s compact.
“This exercise has entailed considering various policy objectives such as the capping of remuneration for a reasonable period, until the gap between executives and ordinary workers has narrowed,” Gigaba revealed.
The statement was in line with recent utterances on the issues by DPE director-general Tshediso Matona, who said the new model would seek to strengthen the link between performance, as defined by shareholder compacts, and remuneration.
A challenge, was how to respond in instances where remuneration levels had already breached certain thresholds. “[In those circumstances], what do you do? Do you undertake a massive across-the-board reduction of remuneration levels, which are bound in contractual relationships? Or, do you temper the rate at which these remuneration levels are rising? I think the answer lies between those two extremes,” Matona said.
In future, bonuses needed to be justified by “demonstrable achievements” of the company and its executives against the shareholder compact.
There was also a need to de-emphasise the monetary rewards and re-emphasise the public-service dimension, while “not making remuneration incentives so unattractive as to place the companies themselves at risk”.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Electricity News
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...