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 Labour and Skills Development News
Article contains comments
Updated 44 minutes ago A series of unfortunate events led to Johannesburg and surrounding areas experiencing significant water shortages over the past week, City of Johannesburg mayoral committee member for development planning and urban management Roslynn Greeff said at a media briefing...
Updated 1 hour 7 minutes ago Based on reports submitted to National Treasury, municipalities owe water boards some R2-billion, Cooperative Governance and Traditional Affairs Minister Pravin Gordhan revealed in a written response to a Parliamentary question on Monday. Municipalities in the Free...
Updated 1 hour 21 minutes ago South African cement group PPC CEO and director Ketso Gordhan has resigned with immediate effect as a result of a “difference of opinion” with the board regarding board procedures for the approval of certain decisions. Nonexecutive chairperson Bheki Sibiya would now...
Recent Research Reports
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.
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.
This Week's Magazine
While Ekurhuleni-based transformer manufacturer Reliable Transformers currently designs, manufactures and tests its products according to the SANS 780 specifications for distribution transformers and other applicable transformer specifications, it is working towards...
Global endpoint security solutions company Kaspersky Lab has introduced new measures to prevent cyber criminals from accessing sensitive data, alongside its malware-signature and heuristic device analysis detection methods. Threats to mobile devices have increased...
To ensure uptake and a positive impact, Wireless Fidelity (Wi-Fi) networks in cities must be provided at schools, community centres and commercial centres to enable citizens and government to access information that will improve access to and delivery of services....
Eco-estate Monaghan Farm, located near Lanseria airport, north-west of Johannesburg, has taken a new approach to modern living and sustainability with its 517 ha development, dedicated to farm living.
Forklift and lift-truck distributor Goscor Lift Hi-Reach launched the Genie SX-180, the tallest self-propelled super boom in Africa, in Johannesburg last month. “As the official distributor of the well-known Genie range of equipment in Southern Africa, we are pleased...