The Financial Services Board (FSB) pays attractive salaries to its executive management in order to retain the best people, Abel Sithole, chairperson of the FSB, told parliament’s Standing Committee on Finance on Wednesday.
Responding to a question from Democratic Alliance MP David Maynier about whether the executive team’s high salaries are justifiable, Sithole said the salaries are all but excessive when compared to the private sector.
According to Maynier, five of the executive committee members earn salaries in excess of R3m per year, while another earns R6 million per annum.
“How do you justify this and against which benchmarks do you calculate this?” Maynier asked.
Sithole said if one compares the scope of the FSB’s responsibility (regulating the entire financial sector in South Africa) with what people earn in the private sector, the executive team are not paid “a lot”.
“Our salary packages need to be attractive so that we can retain the best people.”
His response however didn’t satisfy Maynier. “I stand by my view that these salaries are excessive,” he said, “and I don’t think you should compare yourself with the private sector. You are not the private sector; you regulate the private sector. Your salaries should be in line with other regulators.”
During question time, MPs also asked the FSB for a progress report on the matter of orphan funds that are currently before the courts.
In January this year, the FSB’s head of pensions, Rosemary Hunter, dropped a bombshell when she alleged that the body had illegally closed orphan funds between 2007 and 2013 without making the necessary efforts to trace the the beneficiaries to the detriment of poor people.
She has since taken the FSB and Finance Minister Pravin Gordhan to court to compel them to give her a copy of a final report into the cancellations project by retired judge Kate O’Regan, as well as a copy of a report by auditing firm KPMG.
The DA’s Maynier asked the FSB if it intends on making the reports of O’Regan and KPMG available. (Both O’Regan and KPMG looked into Hunter’s allegations.)
Sithole said the FSB will most certainly make the reports available, “as soon as the court processes have been concluded”.
“I can’t say too much, as the processes haven’t been finished and the two reports are part of the process. At the moment the courts have access to the reports, but officials had to sign a non-disclosure agreement,” Sithole said.
“Will the reports be made public? The answer is a categorical ‘yes’ – as soon as the process is finished. We have no intention to hide anything.”