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.
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.