Eskom and Transnet bonuses: DA to submit proposals for executive pay reform to Presidential SOE Review Committee
Today, the Democratic Alliance (DA) received a Parliamentary reply on Eskom's top executives' pay packages. It indicates that Eskom's two executive directors received R3.537 million in bonus payouts in the past year, on top of their normal salaries of R6.911 million. Yet Eskom cannot guarantee that we will have enough electricity-generating capacity through 2016, and ordinary South Africans continue to struggle with significant increases in electricity costs.
This follows a report this morning by Sake24 about the significant bonuses paid out to Transnet's top management during the 2010/2011 financial year. The report indicates that Transnet's top management received R63.6 million in bonuses on top of their already significant R49.7 million salary packages.
It is in this light that the DA will be delivering a submission to the Presidential State-Owned Enterprises (SOE) Review Committee. The problems at SOEs are manifold and complex, but one of the most basic structural problems remains the clear lack of accountability, feedback and oversight.
Those SOEs that continue to perform below par should not be allowed to pay out bonuses to executives. Even more importantly, when executives fail to perform or when they act inappropriately, action needs to be taken to resolve the situation.
Parastatals such as Eskom and Transnet are of vital strategic importance in our economy and their executives cannot be allowed to continually deliver mediocre outcomes whilst they receive massive "performance" bonuses.
The payout of bonuses should be clearly linked to improved outcomes at these parastatals, such as significant increases in transportation volumes at Transnet or an improvement in the electricity supply situation at Eskom.
The DA's submission to the Presidential SOE Review Committee will therefore contain explicit proposals for such mechanisms to be implemented, along with a review of the mandates of the various SOEs and whether their continued existence is justified.
Statement issued by Pieter van Dalen MP, DA Shadow Deputy Minister of Public Enterprises, August 15 2011
Click here to sign up to receive our free daily headline email newsletter
