Sep 14, 2012
New State company remuneration framework to stress delivery against compactsBack
Johannesburg|Africa|Public Enterprises|Africa|South Africa|Malusi Gigaba|Tshediso Matona|Southern Africa
© Reuse this
Addressing delegates to a Chartered Secretaries Southern Africa conference in Johannesburg on Friday, director-general Tshediso Matona said the department was “grappling” with ways to balance the need to attract top-level talent with society’s current anxiety over salaries that, in some cases, were perceived to be excessive.
Prevailing remuneration methodologies being used by the eight SoCs for which the DPE had direct shareholder oversight had been driven by the entities themselves, which had placed the DPE in a “reactive position” on the matter.
Public Enterprises Minister Malusi Gigaba instituted a review of the framework and indicated in August that he was likely to consider the outcomes in September, before handing the report to Cabinet for its consideration.
A challenge, Matona indicated, 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 associated with serving on a SoC board, or as an executive and to re-emphasise the public-service dimension.
“I am optimistic, because where we have, for example, had a moratorium, for two years, with regard to the remuneration of directors, I haven’t seen a massive exodus,” Matona said, adding that there were many committed South Africans who want to use their time to engage in public service.
The new framework, therefore, will seek to appeal to public service, while “not making remuneration incentives so unattractive as to place the companies themselves at risk”.
Remuneration standards had already been developed by the DPE to guide the SoC boards in determining and setting policies for executive management. These seek to align performance with the shareholder compact; but Matona indicated that there was “still a long way to go”.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Infrastructure News
Updated 4 hours ago Independent, black-owned and managed investment holding company Southern Palace Properties has acquired an 8% stake in Growthpoint Properties from the Public Investment Corporation’s (PIC’s) Government Employees Pension Fund (GEPF) for R4.5-billion. Standard Bank...
Updated 4 hours ago Shareholders of JSE-listed real estate investment trusts (REITs) Octodec and Premium Properties have approved the proposed merger of the two companies, creating a combined property fund that will attract a market capitalisation in excess of R5-billion and comprise...
Updated 4 hours ago The Metal and Engineering Industries Bargaining Council (MEIBC) this week called on employees and employers to exercise restraint as the metals and engineering industries resumed operations following a four-week strike, stating that it regretted the strike’s...
Recent Research Reports
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.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...