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18 February 2005
Cape Town – Government pay packages,
from the president and his ministers to central bank office bearers and
the heads of parastatals, are much more modest than those company
directors are taking home despite the high levels of responsibility
taken on by the country's leaders.
In October last year the independent commission for the
remuneration of public office bearers recommended that the
remuneration, benefits and allowances for all categories of office
bearers should be raised by 7 percent, but the following month
President Thabo Mbeki, in line with inflation targeting and mindful of
recent protracted negotiations over teachers' salaries, trimmed this
rise to 6.2 percent.
It had been proposed, for example, that
deputy president Jacob Zuma's basic salary be raised to R702 993 a
year, with his car allowance rising to R175 735, for a total package of
R878 673. In the event, Mbeki adjusted his basic pay to R696 369, car
allowance to R174 092 and total package to R870 461.
In the case
of ministers, the commission had recommended that the most senior and
long-serving ministers, such as finance minister Trevor Manuel, should
get a basic salary of R639 034 and motor vehicle allowance of R159 758,
giving them a total package of R798 792.
Manuel and Mbeki,
through fiscal discipline, have achieved a growing economy where gross
domestic product trends are healthy, interest rates are more favourable
than they have been in 23 years and inflation is benign.
There
is more in the coffers than ever before for social spending and it
would appear as though the economy is finally, albeit slowly, creating
jobs.
Despite this performance, Manuel, like Mbeki, trimmed his
salary to a basic of R633 061 and car allowance of R158 265, giving a
total of R791 326.
For junior ministers, or those only
appointed after the last elections, the commission had recommended a
basic of R472 178 and a car allowance of R118 045, giving a total of
R590 223.
Mbeki cut this back to a basic salary of R467 765 and car allowance of R116 941, giving a total package of R584 706.
The central bank pays better.
Reserve
Bank governor Tito Mboweni said last year he and his three deputy
governors received pay increases of about 4.5 percent for that fiscal
period, the mid-point of the inflation target set by the national
treasury.
The central bank has now successfully maintained
consumer inflation within the target range of 3 to 6 percent for 16
consecutive months.
For the 12 months to March last year,
Mboweni was paid R2.59 million, including salary and retirement and
medical benefits, an increase of 8.8 percent from the previous year.
The bank did not give details of Mboweni's pay in this fiscal year,
except to say it would increase by about 4.5 percent. The governor and
his deputies do not receive incentives, such as bonuses, over and above
their salary and benefits.
It would appear that parastatals pay even better.
Examining
Maria Ramos's pay package is difficult without referring to that of her
predecessor as chief executive of Transnet, Mafika Mkwanazi, who
resigned in March last year.
In 2004 Mkwanazi received a total
remuneration package of R4.4 million plus a performance bonus of R1.7
million for the financial year to March 2003. Of the remuneration
package, just over R3 million was in the form of salary, R1.3 million
in retirement fund contributions, R31 000 "other contributions" and R44
000 "other payments".
During her period in the top post during the
2004/05 financial year, Ramos received a salary of R943 000, retirement
fund contributions of R54 000 and "other contributions" of R17 000.
The
annual report said Ramos was on a three-year contract expiring in
October 2006. Her contract includes a notice period of four months and
a restraint of trade period of two years from the date of termination
of service.
On exiting, she will be entitled to a termination
benefit equal to one year's guaranteed remuneration. Other benefits
include a performance bonus of 25 percent of guaranteed remuneration,
medical aid scheme benefits and travel concessions.
At Eskom chief executive Thulani Gcabashe received a total package of R4.9 million for the financial year to December 2003.
This
was made up of a salary of R1.9 million, bonus and related payments of
R2.3 million (of which a third was paid out and the rest banked for
payment later), contributions of R402 000 and an expense allowance of
R281 000. He was also given a housing loan of R1.3 million.
But
privatised former state assets may well be the best remunerators of
all. As you can see from the table, the total package of Telkom's chief
executive, Sizwe Nxasana, soared from just over R4 million in 2003 to
more than R11.1 million in 2004.
In fiscal 2003 Nxasana oversaw
the successful dual listing of Telkom in Johannesburg and New York. In
that year Telkom was the western world's best-performing
telecommunications stock.
His 2004 package was made up of R1.9
million in remuneration, R8.2 million in a performance bonus and just
over R1 million in fringe and other benefits.
The latest annual
report said Telkom used "independent remuneration consultants to advise
the remuneration committee of the board of directors on the
remuneration of executive management.
A remuneration level is determined and benchmarked against those of peer groups in the market.
"The
remuneration committee is satisfied that fair remuneration practices
are followed, and that executives are being remunerated in line with
the market."
The only peer for Telkom on the JSE Securities
Exchange is MTN Group, whose chief executive, Phuthuma Nhleko, is one
of the highest-paid company directors in South Africa. He received
R13.8 million as a basic package in MTN's latest fiscal |
