Excessive increases for top management often hampers wage negotiations
Huge increases and bonuses that are awarded to members of top management in an untransparent manner often hamper wage negotiations, trade union Solidarity said today. The trade union therefore welcomed the code of conduct on remuneration and labour practices which is being developed by Business Leadership SA (BLSA). BLSA made this announcement in their comments on the government's national development plan. The trade union said it hoped the code would bring about greater transparency in executive remuneration structures.
According to Chris du Plessis, Solidarity spokesperson, wage negotiations were weighed down by exorbitant salaries and bonuses on executive level in several industries last year. "During the strikes in the petroleum and coal sectors last year, we saw that the excessive increases awarded to executive directors and heads of the relevant companies caused a serious breach of trust between employees and management.
Such a breach of trust leads to complicated negotiations which, in turn, may give rise to strikes which affect all South Africans. Transparency regarding executive pay and bonuses could prevent complications further down the line." Meanwhile, Solidarity also welcomed business leader Bobby Godsell's call for an independent commission on high pay to be set up in South Africa. Du Plessis said that such a commission would only be successful if it remained independent and unaffected by state interference.
There should always be a relation between directors' pay and the value they add to a company, according to Solidarity. "Remuneration must be linked to performance or the contribution that was made. Remuneration models should also be aimed at retaining scarce skills. The practice in South Africa of giving golden handshakes to get rid of weak performers must stop," Du Plessis said.
Statement issued by Chris du Plessis, Spokesperson: Solidarity, May 22 2012
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