Minister defends Eskom's fat-cat salaries
Eskom's top brass, including its chairperson Valli Moosa, last year got between R1-million and R2-million in salaries, plus bonuses, housing loans below the interest rate and share incentives, despite Eskom's not meeting its energy obligations and leaving citizens in the dark.
Moosa, the former minister of environmental affairs and tourism, picked up fees of R1-million. He attended nine board meetings, three of the sustainability committee and one at the invitation of the human resources remuneration and ethics committee, according to the company's 2006/2007 annual report.
Non-executive directors received up to R529 000 in remuneration.
Alec Erwin, the minister of public enterprises, with political responsibility for Eskom, defended the Eskom executives on Friday during a media briefing in Pretoria.
He said their salaries were market-related, and that executives did not get bonuses last year.
Eskom's annual report for 2007 is due in March but the utility did not respond this week to questions on what its senior managers took home in the current financial year.
The most recent report - which covers the period February 2006 to March 2007 - shows that Thulani Gcabashe, the former chief executive, took home a R6,1-million package (R4,6-million in salary and a R1,5-million bonus), he also received a R689 000 housing loan and 4-million bonus shares. Gcabashe earned R13-million in 2005.
Parts of South Africa, especially the Western Cape, experienced power cuts in 2006 and early 2007 during Gcabashe's tenure.
Bongani Nqwababa, the financial director, got R2,8-million (including a bonus of R856 000) and received a R3,3-million housing loan and 1,4-million bonus shares, effective in March.
Jacob Maroga, who in May took over the hot seat vacated by Gcabashe from his previous role as managing director of the transmission division, earned R2-million, picked up a bonus of R1,1-million and has a R3,1-million housing loan.
All divisional directors at Eskom received hefty salaries and bonus packages.
Brian Dames, the managing director of the enterprises division, earned R2,5-million; Johnny Dladla, the key sales and customer service head, took home R2,4-million; Steve Lennon, the head of resources and strategy, received R2,4-million; Mpho Letlape, the human resources chief, got R2,3-million; Ehud Matya, the managing director of the generation division, earned R2,8-million; Duncan Mbonyana, the corporate division boss, received R2,2-million; and Mongenzi Ntsokolo, the head of distribution, earned R2,6-million.
In its annual report, Eskom said it linked management remuneration to the performance of the organisation and an individual's contribution. Market factors were crucial as reward and remuneration were kept at levels that ensured they retained key leadership skills.
Factors influencing the pay of the chief executive, finance director and divisional heads include level of skill, experience, contribution to organisational performance and success of the group.
Remuneration includes a basic package and short- to long-term incentives. They receive a guaranteed pay package based on cost to company, plus benefits such as medical aid, life cover and pension with optional benefits such as a car allowance. The guaranteed amount is increased annually in line with the market.
Patrick Craven, the spokesperson for the Congress of South African Trade Unions, said Cosatu was disgusted that senior executives at Eskom were getting huge salaries and bonuses.
"Inequality in South Africa is growing all the time as the top get huge rewards while workers are getting poorer. In case it is bad because bonuses cannot be justified in terms of the output, and while the fault may not lie entirely with Eskom, they don't deserve bonuses for what has become an embarrassing crisis."
Lesiba Seshoka, the spokesperson for the National Union of Mineworkers, said there was no justification for high salaries or bonuses at Eskom. "The high salaries should be used instead to offset the burden on the public, who are now expected to pay more for electricity."