Eskom’s top executives took a pay cut in 2019 on the back of the group’s dismal financial performance – but still walked away with multi-million rand salaries, and several golden handshakes.
The crisis-hit power utility has published its financial statements for the 2018/19 year ended March 2019, revealing how much money it doled out to executives.
Exiting chief executive Phakamani Hadebe, who will step down from the company at the end of July 2019, will receive a final paycheque of R8.6 million for his one year on the job, while chief financial officer, Calib Cassim will receive R3.24 million.
Cassim’s pay as CFO is significantly less that his predecessor, Anoj Singh, who took pay of R9.4 million in 2018.
The other 13 members of Eskom’s group executives received a total payout of R44 million, down from R51.6 million last year. Included in the group payout are two notice payments of R6.4 million for executives who are leaving.
Eskom’s executive remuneration comprises a guaranteed package, other payments (such as personal security, motor vehicle expenses and cellphone costs), as well as short- and long-term incentives only if the qualifying criteria are met.
No short-term bonuses were paid out, and no new long-term bonuses were awarded, given that none of the group’s conditional targets for those rewards were met.
Despite this, the average pay for group executives (excluding CEO and CFO) was R3 million for the year, or R1.9 million excluding notice payments.
A further R6.85 million was paid to non-executive directors, including a R1.6 million payout for chairman, and new acting CEO, Jabu Mabuza.
One of the biggest costs for Eskom, and a major contributing factor to its financial problems, is covering the costs of its bloated workforce.
As at the end of March 2019, Eskom employs 46,665 full time employees, which is 66% more than it needs, according to analysts.
The group has made efforts in the past to cut back on its costs related to employees – through retrenchments, and a wage freeze – but all measures to do so have been met with backlash from unions, including threats to shut the country’s electricity grid.
In 2018, Eskom agreed to a 7% wage hike for workers, after initially proposing a 0% increase.
As such, Eskom’s 2019 wage bill increased even further, hitting R32.35 billion, up from R28.83 billion in 2018 (including salaries, overtime, benefits, leave and bonuses).
Averaged out, this comes to R693,240 per employee (2018: R592,790), the highest point average pay has reached at the company over the last 17 years.