Telkom chief executive takes a pay cut despite growth in company
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Maseko’s total pay cheque was R23.17million in the 2019 financial year, including an R8.9m guaranteed package, and a short incentive of R7m.
Dividends paid in unvested shares amounted to R2.5m, the company said in its 2019 Integrated Report released on Friday. Maseko’s total remuneration stood at an R27.19m in the year ended March 2018, including R8m of guaranteed pay, and R7.5m in short-term incentives.
Telkom rewarded Maseko with R11.5m in vested shares in 2018.
Telkom said it paid Deon Fredericks, the chief financial officer who stepped down at the end of June, R4.7m and R5.8m.
Frederick’s successor, Tsholofelo Molefe, was paid R6.4m in the 2019 financial year and R1.82m for her previous role as deputy chief financial officer, taking her total to R7.8m.
The company paid its prescribed officers R63m.
Maseko, who has been chief executive since April 1, 2013, said that the company was reaping the fruits of new revenue streams.
“Over the past six years, the contribution of our new revenue streams has grown significantly, the mobile revenue contribution increased from 3.2 percent to 25.7 percent, and IT revenue grew from 0.9 percent to 16.2 percent,” Maseko said.
Telkom added 4.5 million new active subscribers in the year to end-March, with mobile revenue outperforming its MTN and Vodacom rivals, who buckled under fierce competition.
Telkom, which operates Openserve and Telkom Consumer, said that earlier this year revenue had grown 5.3 percent to R41.8 billion from R39.6bn in 2018, mainly driven by a 58.3 percent increase in mobile service revenue to R8.5bn from R5.1bn in 2018.
BCX, formerly known as Business Connexion, recorded a 6.2 percent growth in IT revenue from external enterprise customers, despite the weak economic environment.
Maseko said in the report that BCX had stabilised as an organisation, “although it is not where we hoped it would be by this time.
“BCX has gone through a restructuring process, with the aim of stabilising the business by arresting the declining financial performance, simplifying the structure to create efficiencies and reducing the organisation's cost to serve,” he said.
The company paid R728m in severance packages related to the restructuring at BCX.
Telkom chairperson Jabu Mabuza, who stepped down at the end of May, said that the year to March 2019 was tough.
“South Africa experienced a short-lived technical recession, business and consumer spend reduced on the back of the increased value added tax rate, unemployment rates remain high, and an increase in the fuel levy exacerbated the hike in fuel prices,” said Mabuza.
Mabuza said customer needs continued to shift from traditional voice stream products to mobile, fibre and other lower-margin products and services.
“This, together with a relentless competitive landscape, low economic growth and a volatile rand, place our revenue and margins under pressure.
"To mitigate this we make optimal use of our capacity to provide customers with products, services and solutions that are cost-effective and contain high embedded value. We continue with cost management initiatives, and seek to maximise strategic growth,” he said.