Durban - Multimillion-rand bonuses for Eskom execs have been likened to a cold “slap in the face” for consumers – many of whom cannot afford to keep their heaters on this winter.
This was as it emerged this week that directors and executives at the parastatal had been awarded R18.3 million in performance bonuses.
The DA’s spokesman on Public Enterprises, Natasha Mazzone, said the “shocking” high performance bonuses paid to Eskom bosses would come under scrutiny at the next sitting of Parliament’s Public Enterprises Portfolio Committee.
Mazzone said she planned to raise the issue with the Minister for Public Enterprises, Lynne Brown, when Parliament resumed in the second week of August.
Describing the performance bonuses as “nothing less than a slap in the face to every South African”, Mazzone said South Africans should be “appalled” at the massive salaries and bonuses received by Eskom executives.
Mazzone was reacting to the release of Eskom’s report on its financial performance for the 2015-2016 financial year, which she said revealed that Eskom bosses received R18.3m in short- and long-term performance bonuses. This meant an average of R1.6m was “doled out for Eskom directors and executives for keeping the lights on”.
She pointed out that “with ordinary taxpayers footing the bill for a R23 billion Eskom bailout in 2015, the average person in the street would be devastated to see bonuses of such magnitude being paid out”.
The man-in-the-street, meanwhile, was faced with the burden of increased electricity bills – Eskom was granted a 9.6% tariff hike by the National Energy Regulator this year – and an explosion of food costs, while the Eskom directors “were laughing all the way to the bank”, she said.
Mazzone pointed out that since load-shedding began in 2008, Eskom executives had received more than R73m in bonuses, excluding the R18.3m revealed this week.
Despite the freezing cold in parts of the country, some people were having to turn off their heaters because electricity was unaffordable, she said.
It also emerged this week that Eskom group chief executive, Brian Molefe, earns R792 000 a month, excluding bonuses. His package is worth R9.5m a year.
Reacting last night, Paris Mashego, the National Union of Mineworkers energy sector co-ordinator, said he was busy calculating how many years it would take a NUM member to earn Molefe’s salary.
He planned to issue a press release to make the public aware of that figure, he said.
Minister Brown recently put a freeze on remuneration increases (but not bonuses) of Eskom executives, but approved a below-inflation increase of 4.6% for non-executives, while commending the Eskom board and executive management team for stabilising the country’s national power grid.
Commenting earlier this year, Eskom chairman, Dr Baldwin Ngubane, explained that Eskom’s approach to remuneration and benefits was designed to attract and retain skilled, high-performing executives and employees.
“We aim to remain competitive to attract and retain key skills, by providing market-related remuneration structures, benefits and conditions of service,” he said.
Dr Mark Bussin, an executive committee member of the South African Reward Association, said recently that people struggling to come out on their salaries did not understand what executives did to earn their millions.
“On the other hand, executives are under continual scrutiny, pressure, risk and forever increasing fiduciary responsibility,” he said.
“It is governance and onerous fiduciary duties that drives executive pay up and up.
“However, with political interference setting unrealistic political goals and targets, it can put Eskom into the red. This is not entirely the executive’s fault.
“Their original budget showed a profit, but the politicians, for example, instructed the electrification of several voter areas and they made a loss not exactly their fault.”
Meanwhile, Eskom reported that it had not implemented load shedding for more than 10 months and that one reason was the good progress made on Eskom’s many new build projects, which were continuing and which would add 8 600MW of new capacity by 2020/21.
Releasing the financial results for the year ending March 31, Molefe said the stability at the board and executive management levels was a launchpad to drive accountability and better manage the business.
The organisation had been stabilised, earnings had surged 37.4% to R32bn, the net profit was R4.6bn and R17.5bn in cost savings had been achieved, which was R4bn more than the target.
Ngubane said Eskom would no longer be a constraint to the country’s economic growth. The five-year corporate plan aimed to re-establish Eskom as a catalyst for growth.
Asked to comment, a spokesman for the Public Services Department referred the Daily News to Eskom. However, no response was received from Eskom.
* Eskom announced on Thursday it had secured loan facilities of some R20bn from the African Development Bank to fund the general capital expansion programme,which includes “new build; maintenance and refurbishment of generation, transmission and distribution infrastructure; and skills upgrading programme”.