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 Construction News
Article contains comments
Article contains comments
US-based beverage producer Pepsi this month set up operations, with about 300 employees, at a new R70-million high-tech, custom-built headquarters at OR Tambo International Airport’s Aerotropolis precinct in Johannesburg. Pepsi, through its South African company...
Updated 2 minutes ago A debate over the impact on the industry of the local content regulations governing solar water heaters (SWHs) has heated up as the Department of Trade and Industry (DTI) and industry body, the Sustainable Energy Society Southern Africa (Sessa) stand firm on their...
Updated 56 minutes ago State-owned power utility Eskom on Monday urged consumers to save electricity as it implemented stage one load shedding, owing to unforeseen technical problems at some of its power stations.
Updated 1 hour 35 minutes ago A strike is looming at commercial airline Comair, affiliate of Kulula and British Airways airlines, after salary negotiations with its cabin crew failed. Negotiations between Solidarity and Comair started in September 2014, and, in December, the union referred a...
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
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...