Armscor has denied that its CEO, Sipho Thomo, received a questionable 89 percent boost in salary and benefits last year when the entity posted a net loss of R9-million.
The state-owned arms acquisition company said yesterday that its 2009 annual report reflected the "late payment of performance remuneration" and a one-off "restraint of trade payment" in addition to the normal salary and annual bonus increase paid to Thomo.
Armscor's senior human resources manager, Francois Potgieter, said the 2009 salary and bonus increase amounted to only 14,18 percent.
He was responding to questions posed by the DA defence spokesman, MP David Maynier, who noted that the annual report reflected an increase in benefits of 1 181 percent in addition to a salary hike of 19 percent.
It was the second time in little more than a week in which a state-owned entity publicly backtracked on the accuracy of its CEO's salary and benefits as reflected in its annual report.
Last week, Eskom's board denied that CEO Jacob Maroga received a 27 percent salary increase - as set out in the utility's annual report for 2008/2009.
It said the increase in Maroga's salary reflected a staggered pay adjustment aimed at bringing him to CEO level that was agreed upon when he was appointed in 2007.
The escalation in his salary was phased in over two years.
Eskom board chairman, Bobby Godsell, told outraged MPs that Maroga's salary hike was actually only 9 percent, lower than the 10,55 percent increase awarded to its workers.
Eskom and Armscor posted net losses of more than R9m for the 2008/09 financial year.
Maynier questioned why Thomo had received such a hefty increase at a time when there was "concern about the long-term viability of Armscor".
He said the DA intended asking "hard questions" about Thomo's remuneration - and also about an average 302 percent increase for directors and board members - when Parliament's defence oversight committee met the entity next month.
Yesterday, Potgieter said the massive increase reflected in Thomo's remuneration under the heading "other benefits" totalling more than R1.3m was mainly for a one-off restraint-of-trade payment in terms of his contract with Armscor.
Potgieter said the payment of just over R1m was compensation for an agreement with the board that he would not seek other employment in the industry.