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Former Eskom CEO paid far more than thought

Former Eskom CEO paid far more than thought

Former Eskom CEO Brian Dames – who in 2014 received the highest executive pay at the company in more than a decade – appears to have been paid far more than initially reported.

This is according to a parliamentary response to queries about the executive’s pay, which was reported by Eskom as R15.4 million in the past financial year.

However, Public Enterprises Minister, Lynne Brown, noted in the response that Dames’ total pay was in fact R22.78 million in the year, including a R5 million package at the end of his contract, as well as R1.9 million in back pay.

Dames also received a R1.92 million payout in long-term incentives.

Eskom has come under fire for paying its top executives millions in salaries amid a financial, and operational crisis at the power utility.

Finance director, Tsholofelo Molefe defended Dames’ salary back in June, saying that he was entitled to it.

“If we look at his salary and compare it to other companies, he doesn’t even get close to what other CEOs of smaller companies are getting,” Molefe said.

Top executives at the company took home a total of R60 million in the 2014 financial year, up from R57.4 million the year before.

Further adding to the group’s questionable pay trends – described as “disgusting” by the Democratic Alliance – the group also has a history of high expenditure on employee salaries.

In its full year report for 2014, Eskom listed employee costs totalling R25.62 billion rand.

Averaged among its 46,000-plus employees (as of September 2013), this equates to just shy of R550,000 per person on an annual basis.

Eskom CEO salaries

Eskom CEO salaries

Financial and operational problems

Earlier in the week (26 November) Eskom asked its staff to consider voluntary retrenchment packages, though noted that forced retrenchments were currently not on the cards.

In its interim results for the six months ended September 2014, Eskom saw its profit drop 24% to R9.3 billion from R12.24 billion before.

The group said it needs a substantial cash injection to ease liquidity pressure and to avoid another credit downgrade as it struggles to keep the lights on in Africa’s most advanced economy.

Over the past few weeks, the embattled company was forced to implement nation-wide load-shedding, and continues to operate under severely constrained systems.

Trade union Solidarity has warned that the country’s electricity crisis is bigger than initially anticipated and will last for a long time.

The union called for Eskom’s monopoly over power supply be broken.

“South Africa’s total dependence on Eskom results in major system risk. South Africa should allow more electricity suppliers, reduce the risk of error and allow more inventiveness as far as the supply of electricity is concerned. The market for electric power generation and distribution must be opened up,” it said.

More on Eskom

Eskom executives’ pay tops R60 million

Another Eskom silo cracked: Solidarity

Eskom moves to cut staff

Privatise Eskom says DA, No says ANC

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • h3fty1

    No wonder he bolted – Got enough to retire by doing absolutely nothing! Probably used some of it to get off the power grid as he knows the power situation is real…

  • Eskom (Asskom)

    Disgusting here we are paying high electricity rates, and they don’t even care about the knock we as south Africans has to take, inconsiderate, very inconsiderate.

  • Craig Dennis

    You are entitled to nothing. You are required to perform, if your performance is exceptional, you then “qualify” for incentives. FFS you people are thick!

  • CypherGate

    This is just ridiculous. We have our own Illuminati thing going on in SA lol

  • TheZenOfZen

    There’s that word “entitled” again! What a load of [email protected] How can anyone be entitled to an annual salary of R22million? Least of all a public servant. Other CEOs of other (private) companies that are actually functioning properly and running at a profit, no doubt.

    Well at least he can afford a really nice, quiet generator to run his mansion when the rest of us are using candles.

    Come to think of it, any CEO of an institution providing an essential service, should not be taking home this amount of cash. If they are, then we are being over charged for that service.

    • tongue in cheek

      he must also pay back the money for screwing Eskom up royally

  • Leenesh Singh
  • guest

    Im glad i dont contribute to such nonsense anymore but i do wish this country would start doing something about this nonsense. If not then carry on bashing your head on that wall.

  • kevin

    Paid a huge salary to f–k up must be ANC

  • Mr. H

    He took all the money and left us in the DARK!

  • Monika

    So…..Eskom is in financial trouble… does one justify paying out money like that when they are in financial trouble – and then a “bail out” is expected from the rest of use with increased taxation and rates – are they stupid. If you own a business, would you give yourself a fat salary to the detriment of your own company –

  • Wurnman

    Wonder what new CEO must think as he is getting a short end then…

  • Desperate Dan

    These amounts are OBSCENE WTF were his qualifications to get that sort of money? No wonder the average salary per Eskom employee is over R500 000. When will this Shlt stop??

  • Kevin

    You just have to love it when these people get compared to “other” companies. Well in most “other” companies, incentives are earned, bonuses are paid on performance, shareholders are reprorted to and CEO’s are generally fired if they do not perform. Spot the difference.

  • bengine

    @22 Mil – I will take the job.

    At that price – how hard can it be…

  • hongkongpom

    Disgusting at the blantant greed and non performance of Eskom. The buck stops with the CEO and frankly it sound like he deserted a sinking ship…

    • tongue in cheek

      he was the one who opened the seacocks to scupper the old good ship Eskom

    • Konstabel Koekemoer

      Exactly he ran away from the organization which he helped to turn from bad to worse.

  • bookworm

    So profits are down at Eskom, the former CEO got over R22 million bucks for goodness knows what, and the consumer is expected to pay more and more in every direction for rank incompetence! Then they have the temerity to start asking ordinary employees at Eskom to consider taking a hike! Privatisation is not the route, competency and proper management of resources and staff together with proper preventative maintenance of is paramount importance, as common sense dictates. Not to mention competent qualified staff whose stated qualifications and references are properly verified before appointment! All of this is common sense and “best practice” – but then again, there is nothing common about common sense, especially not with the present lot in charge here!

  • LionKing

    I would love to see what the very modest Mr John McRae who did wonders at ESKOM (including the electrification of SOWETO when the Nats were in power) was rewarded with! For sure, a pittance relative to the modern failures!

  • mick

    Know a chap who works at eksdom.
    He just pockets his pay and really doesn’t give a sh*t.

  • Lesley Ganserer

    For doing what?

  • Why not pay them performance bonuses? That way, they would have to pay in, id calculated right …

    Mind you it is not only in SA that CEOs get paid handsomely to underperform. In 2001, Air New Zealand bailed from a failed bid at taking over Aussie icon airline Ansett (thereby ensuring Ansett‘s messy closure), lost over $1-billion, and paid out its CEO a fat bonus. Then there were all those bonuses corporate bankers in the US and UK paid themselves after being bailed out by their governments.

    Not that it makes it right here, I hasten to add. Just some perspective.

  • Konstabel Koekemoer

    And under Brian Dames Eskom went from bad to worse, he should have been fired without any compensation for the Medupi mess a lot of which happened under his watch.

  • Charles

    And so the BS continues! Boy I hope I get lucky to land that job, do it well or poorly but still get paid handsomely and then still receive more pay after leaving…. Itslike a never ending lotto party!

  • Frank Payne

    “he doesn’t even get close to what other CEOs of smaller companies are getting,” Sooo? “Other companies” are serving their clients AND making profits! In this case as in other parastatals, remuneration and efficiency and service delivery don’t equate at all. On performance he was worth possibly R250,000 pa.

  • Hans

    Interesting that the peaks on the salary graph correspond with the years where we experienced the most load shedding…

  • GoodWolf

    “If we look at his salary and compare it to other companies, he doesn’t even get close to what other CEOs of smaller companies are getting,” Molefe said. Yes, but those smaller companies close their doors if no longer sustainable. Eskom simply puts out its hand to government. Where’s the pressure to perform?

  • Dhiren

    Eskom should cut the CEO’s salary. Why should he earn that hefty amount when he does not do his work. If he did his work then there would not be a need for load shedding. Eskom asks for unreasonable rate hikes not to sustain the entity but instead to accomodate these big salaries.

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