Mine bosses’ pay in spotlight

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iol news pic Amcu platinum strike REUTERS Lonmin chief executive Ben Magara. File photo: Siphiwe Sibeko

The strike has forced mining executives to ask themselves difficult questions about their salaries, writes Angelique Serrao.

Johannesburg - The four-month strike in the platinum belt has not only caused a human tragedy to unfold in communities around the mines, it has also forced mining executives to ask themselves difficult questions about the enormous pay packages they take home.

Last week, The Star conducted a lifestyle audit on Association of Mineworkers and Construction Union (Amcu) president Joseph Mathunjwa and found the union leader owned three cars worth about R900 000 and three properties, together worth about R1 million.

He told the paper that he had worked hard for everything he owned, he felt his lifestyle had nothing to do with the strike and he believed the same type of audit should be done on the “fat cat mining bosses” whose salaries are so inflated.

The chief executives of the three main mines on the platinum belt – Lonmin, Anglo American Platinum (Amplats) and Impala Platinum (Implats) – all earn multimillion-rand salaries, according to the companies’ annual reports.

By comparison, miners in the sector take home about R6 000 a month.

IOL  Chris Griffith_COUNTRY_E1 Chris Griffith, chief executive of Anglo American Platinum. INDEPENDENT NEWSPAPERS

Chief executive of Lonmin, Bennetor Magara, earned about R12m last year. He also received R11m in shares.

Magara is an active director at five companies. They are: Akanani Mining, Eastern Platinum, Richards Bay Coal Terminal, Western Platinum and Foskor.

Magara has been a chief executive at Lonmin since last July.

He is a highly experienced mining engineer who has spent his entire career working for Anglo American. He has 26 years’ experience in the mining industry. Magara was born in Zimbabwe and is on the board of trustees of the Unisa foundation.

One of Magara’s first moves as chief executive at the mine was to go to the Eastern Cape last year to meet the spouses and children of the workers who were killed in Marikana by police officers in 2012.

He committed to paying for the education of the children of the 44 people who had died.

IOL  Terence Goodlace_COUNTRY_E1 Terence Goodlace, chief executive at Impala Platinum. INDEPENDENT NEWSPAPERS

Magara told The Star that he had taken up the job as chief executive of Lonmin because he loved what he did and not because he wanted to make money.

“I did it for the challenge. I wanted to make a difference,” Magara said.

He said he arrived in South Africa from Zimbabwe a month before the elections in 1994.

“It was not an easy thing arriving at that time, but I wanted to be in South Africa… As a black professional mining engineer I could have been anything I wanted,” he said.

Magara said that if his main aim in life was to become wealthy, he could have taken up a BEE position and done exactly that.

He described himself as having a lifestyle that enabled him to put his family first, wanting his children to be comfortable.

He said that it was the board at Lonmin that decided what his salary should be and he did not enter negotiations on his pay package.

Magara said the strike has made him think more deeply about what the wealthy can do for society.

“I think we should be doing more for the underprivileged.

“We ignore the poor at our peril. I think those of us who have wealth need to ask what we can do in our personal capacity to do more. If every South African helped just one other family we would be in a very different situation.”

He said he felt that Amcu brought the wealth debate squarely onto the table.

“They took the elephant and put it on the table. They have made every single stakeholder reflect on themselves.

“We have been called to action and it’s time for us to reflect as custodians of resources how we can make sure everyone gets a slice of the cake.

“But I believe that the only way we can help each other is through a thriving business. We need our employees back at work.”

Chief executive at Amplats, Chris Griffith, is the highest earner of the three chief executives.

His total remuneration, including basic salary, cash and bonus shares was R17.6m last year; R4m was also awarded to Griffith as a bonus share plan and a further R11m if performance targets were met over three years.

Griffith has been the chief executive at Amplats since 2012 and has more than 19 years of mine management experience.

He is an active director at Anglo American South Africa, Anglo Platinum Management Services and Rustenburg Platinum Mines.

He was the centre of controversy recently, having to apologise for comments he made to Business Day justifying his salary.

The paper had reported that Griffith, his 11 executives and top management had been awarded R25.3m in a bonus-share scheme that would pay out in three years as part of a skills-retention scheme.

A further R51.8m would be awarded to the team over the same period if a number of performance criteria were met.

Griffith said in the article: “Am I getting paid on a fair basis for what I’m having to deal with in this company?

“Must I run this company and deal with all this nonsense for nothing? I’m at work. I’m not on strike. I’m not demanding to be paid what I’m not worth.”

Griffith said that wage and employment depended on skill, education, and supply and demand.

“If this debate is around the comparison of chief executive pay and somebody else, then we’re completely missing the point. There is a greater supply of lower-skilled people,” he told Business Day.

“What the unions are doing is putting more people out on the street.”

Amplats did not want to comment.

Chief executive at Implats, Terence Goodlace, has a salary of R7.5m.

Goodlace has been the chief executive at Implats since 2012. He has extensive mining experience, having worked in the industry since the early 1980s.

Last year, Goodlace turned down the company’s offer of short- and long-term bonuses as part of his salary package.

“This was a very personal decision which I made a few months ago as I believe we need to be sensitive to the environment in the country and internationally,” Goodlace told the Financial Mail in October 2012.

“I have tried to keep this decision low-key as our focus as a company should rather be on creating an environment of care, calm, stability and safe production.”

Implats decided not to comment on the lifestyle audit.

“It is in the public domain that Mr Goodlace has not accepted any increases, bonuses and share options since having joined Implats in July 2012.

“The details of his salary are publicly reported, and, in our opinion, personal comments on his own package would be meaningless,” said Implats group corporate relations manager Alice Lourens.

Professor Roger Southall, the head of sociology at Wits University, said he thought the way everyone had been handling this strike had been disastrous.

He said for the salaries they earned, the executives didn’t sound like they lived extravagant lifestyles, but he didn’t find this surprising.

“Those who are new to wealth tend to display it more ostentatiously. Those who have had money for a while tend to put their wealth into other areas, such as shares.

“They might also have properties and investments outside the country.”

He felt that many people who took up top positions in companies were more motivated by job satisfaction than wealth.

“Those of us who are middle class also have to wonder though, about those who have so much money and they don’t feel a need to spend it – yet they motivate their lives by accumulating more wealth.”

What they take home:

* Bennetor Magara, chief executive of Lonmin

He earns R12.9 million according to the companies annual report. He also received R11m in shares.

Magara owns a home in Fourways which was bought for R3.5 million in 2005.

He owns a property in Paulshof which was bought in 2003 for R509 000.

He owns a property in Hoëveldpark which was bought in 2000 for R365 000.

Magara owns a farm in Pietermaritzburg which was bought last year for R2.8m. He owns a Toyota Hilux, two Land Rovers and an X164 Mercedes-Benz.

* Chris Griffith, chief executive of Anglo American Platinum

His total remuneration, including basic salary, cash and bonus shares was R17.6m last year and R4m was awarded to Griffith as a bonus share plan and a further R11m if performance targets were met over three years.

Griffith owns a house in Midrand which was bought in 2004 for R720 000 and a property in Fish Hoek which was bought in 2009 for R600 000.

Griffiths owns a 5-series BMW, a Kia Sportage and a Volkswagen Beetle.

* Terence Goodlace, chief executive at Impala Platinum

His salary is R7.5m.

Goodlace recently sold a property under his wife’s name in Morningside Manor for R4.1m. Goodlace owns a 5-series BMW.

What other CEOs take home:

Mobile company chief executive salaries

* MTN Group chief executive Sifiso Dabengwa walked away with a total salary of over R48m last year – more than double the R23.5m he received in 2012.

* Chief executive, executive director and chairman of executive committee, Vodacom Group Limited Mohamed Shameel Aziz Joosub earned R16.5m last year.

Banking chief executive salaries

* Nedbank chief executive Mike Brown’s basic salary is R6.532 million.

* Standard Bank joint chief executives Ben Kruger basic salary R7.962 and Sim Tshabalala R7.648 million

* Absa chief executive Maria Ramos basic salary R6.658 million

* FNB chief executive Michael Jordaan basic salary R4.917

* Capitec chief executive Riaan Stassen basic salary R8.859 million

Other chief executive salaries

* Shoprite chief executive Whitey Basson received a total guaranteed pay of just more than R40m.

* Harmony Gold Mining chief executive Graham Briggs earned R11.2m last year.

* Gold Field’s chief executive Nick Hollard earned R45.3m, of which R9.3m was his basic salary.

* Eskom chief executive Brian Dames earned R8.4m last year.

* Transnet chief executive Brian Molefe took home R12.47m.

Source: Media articles on various companies’ financial reports

The Star



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