Eskom has not applied to Nersa to pay performance bonuses
7 January 2020
Eskom has not applied to the National Energy Regulator of South Africa (NERSA) for R1.8 billion to pay performance bonuses, as reported in a Sunday newspaper.
The MYPD4 application made by Eskom for the three year period did not include any allocation for performance bonuses. The application included a provision for an annual bonus for the three year period, which is equivalent to a 13th cheque which forms part of the Eskom basic conditions of service and cost to company - i.e. employees’ normal remuneration package.
For those employees for whom a 13th cheque is not part of their conditions of service (i.e. non-union employees) an option is given to structure their package to provide for a 13th cheque without increasing their overall compensation. In keeping with a board decision reflecting the poor performance of the business, no performance bonuses have been paid to employees in the past two years.
NERSA in its decision incorrectly disallowed these contractual costs and hence they do not form part of the allowed revenue granted to Eskom.
Separately, Eskom has lodged a court application to review NERSA’s fourth multi-year price determination (MYPD 4) decision to deduct the R69 billion that government has provided to Eskom as shareholder support. The court application does not include any other aspects of the MYPD4 decision. This case will be heard in court next week.
Issued by Eskom Media Desk, 7 January 2020
