State-owned company CEO salaries

Chief executives at South Africa’s state-owned companies rake in millions each year amid less than stellar financial performances.

According to a parliamentary response to queries about the Eskom executive’s pay, last week, Public Enterprises Minister, Lynne Brown, noted that former Eskom boss, Brian Dames’ total pay for the 2013 financial year was in fact R22.78 million – higher than the R15.6 million listed in Eskom’s full year report.

Dames’ pay included a R5 million package at the end of his contract, R1.9 million in back pay – as well as a R1.92 million payout in long-term incentives.

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

Finance director, Tsholofelo Molefe defended Dames’ salary back in June (when it was still the highest figure paid to an Eskom executive in a decade), 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.

South African executives in the private sector tend to walk away with million at the end of each year – with top executive salaries reaching as high as R120 million.

However, Eskom is not a publicly-listed, for-profit company, and is better compared to other parastatals.

In that context, Dames’ salary far outstrips any other CEO of a state-owned company – including Telkom, which is a semi-private company listed on the JSE.

In fact, the executive’s R22.8 million payout is higher than most SOE top executive’s salaries (excluding Telkom) combined.

South African parastatal CEO salaries

Companies in crisis

Eskom, while claiming the highest spot for executive pay amongst parastatals, isn’t the only company that is plagued by controversy.

Notably, most of the state-owned companies listed above find themselves in dire financial and operational straits, or find themselves embroiled in various corruption scandals and conflicts.

Former acting SABC CEO Tian Olivier, with a paycheque of R1.76 million, wasn’t even the top paid executive at the public broadcaster – controversial COO, and now acting CEO, Hlaudi Motsoeneng took that ‘honour’, having received R2.87 million in the same year.

The loss-making SABC also paid R65.76 million in bonuses to staff members.

The country’s public protector reported in November 2013 that there was widespread corruption at the SABC, fingering Motsoeneng and other executives as the main perpetrators.

The SA Post Office, too, suffers from serious maladministration, having blown R2.1 billion in irregular expenditure in the past financial year – mostly as a result of the irregular awarding of tenders, according to a draft audit report by Deloitte & Touche and Nkonki.

Telkom has only recently managed to pull itself back into profit – with much credit due to a turnaround strategy implemented by CEO Sipho Maseko.

While the strategy has not been without glitches – specifically with regards to a much-fought retrenchment strategy – the company has managed to recover its financial position, pushing its stock values up over 120% over the past year.

More on state owned companies

Widespread corruption at SABC: report

SA Post Office fingered for R2.1 billion irregular expenditure

Former Eskom CEO paid far more than thought