R23 million payday for Telkom CEO Sipho Maseko

Telkom has published its annual report for the 2019 financial year, revealing what its top executives were paid.

Group chief executive officer (CEO) Sipho Maseko picked up a R23.2 million paycheque, made up of a guaranteed salary of R8.3 million, a bonus of R7 million and a vested share payout of R5.3 million as part of his long-term incentive. Dividends paid on unvested shares totalled R2.56 million.

Former group chief financial officer (CFO) Deon Fredericks, who stepped down at the end of June 2018 to become the group’s chief investment officer (CIO), was paid R4.76 million for his role as CFO, and R5.8 million for his role as CIO, bringing his total to R10.56 million for the year.

Fredericks’ successor, Tsholofelo Molefe received R6 million for the year as her role as CFO, and R1.82 million for her previous role as deputy CFO, taking her total to R7.8 million.

Telkom paid its prescribed officers a total of R63.2 million for the year. Combined with director pay (of R40.8 million) the group paid a total of R104 million to its top executives.

In 2018, Telkom paid a total of R153.9 million.

Financial performance

In May, Telkom reported a strong set of results for the year ended March 2019, on the back of massive growth in its mobile segment.

Mobile service revenue increased by 58.3%, supported by an 85.9% growth in active subscribers to 9.7 million, it said.

However, it reported issues in the fixed-line business which showed a decline in revenue of 7.9% as customers migrated to new technology.

Fixed voice and interconnection revenue declined by 14.3%, which negatively impacted the overall performance of Openserve and BCX. Despite this impact, overall revenue decline was contained at 3.3% for Openserve and 3.4% for BCX, it said.

Other key salient features include:

  • Group operating revenue up 5.3% to R41.8 billion
  • EBITDA up 8.5% to R11.3 billion
  • Capex of R7.7 billion with capex to revenue ratio of 18.4%
  • Final ordinary dividend of 249 cents taking the annual dividend to 362 cents, an increase of  2.0% year on year
  • Headline earnings per share was up 22.6% to 722.4 cents per share.

Telkom also shed more than 2,000 permanent jobs over the past year, or 12.5% of its workforce.

The operator noted that permanent jobs declined to 15,296 from 17,472 in the prior year – a loss of 2,176 people.

“The decrease in permanent workforce was primarily due to VSP’s (voluntary severance package) and VERP’s (voluntary early retirement packages) offered and the section 189 process,” it said.

Telkom has also seen a resurgence in its share price under the guidance of Maseko,

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R23 million payday for Telkom CEO Sipho Maseko