Sep 14, 2012
New State company remuneration framework to stress delivery against compactsBack
Johannesburg|Africa|Public Enterprises|Africa|South Africa|Service|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 Economy News
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 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 infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...