Telkom cannot pay executives R100 million and then fire 3,000 workers: union

Trade union Solidarity has asked for a moratorium on forced retrenchments at Telkom as the company looks at cutting more than 3,000 jobs.

The union said that the retrenchments are particularly concerning when considering how much executives are paid at the company.

“A company cannot pay its executive team more than R100 million and then get rid of 3 000 of its workforce,” said Solidarity chief executive officer (CEO), Dr Dirk Hermann.

“That is reckless and, given the labour market retrenched workers have to face, it is merciless. In the previous financial year Telkom’s CEO, Sipho Maseko, alone took home a full R23 million.”

Hermann added that the fact that Telkom now wants to retrench up to 3,000 people serves as confirmation that the company has failed dismally to retrain its people for growth areas such as mobile services.

“When a company fails to train its workforce for new challenges, it should not retrench the workers; it should get rid of the top management,” said Hermann.

“A further 3 000 jobs being cut are too many. If staff numbers need to be reduced further, it can be done by means of voluntary processes and natural staff turnover,” he said.

Job losses

On Wednesday (15 January), Telkom informed trade unions and staff that it could cut up to 3,000 of its more than 15,000 employees as it struggles with declining performance in fixed voice and data services.

The company said that it is also grappling with organisational and operational inefficiencies linked to fixed voice and data services, which require more staff to install, maintain and market.

“Telkom will continue to consult with the unions, and it is our hope that through considered engagement with the unions, we will come to a mutually beneficial solution,” a spokesperson said.

“Out of respect for our employees, we will share information once we have engaged further with our employees and unions.”

Executive pay

Telkom’s annual report published in July 2019 showed that Maseko was paid R23.2 million.

This was made up of a guaranteed salary of R8.3 million, a bonus of R7 million and a vested share payout of R5.3 million as part of his long-term incentive. Dividends paid on unvested shares totalled R2.56 million.

Former group chief financial officer (CFO) Deon Fredericks, who stepped down at the end of June 2018 to become the group’s chief investment officer (CIO), was paid R4.76 million for his role as CFO, and R5.8 million for his role as CIO, bringing his total to R10.56 million for the year.

Fredericks’ successor, Tsholofelo Molefe received R6 million for the year as her role as CFO, and R1.82 million for her previous role as deputy CFO, taking her total to R7.8 million.

Telkom paid its prescribed officers a total of R63.2 million for the year. Combined with director pay (of R40.8 million) the group paid a total of R104 million to its top executives.

Read: Massive retrenchments at Telkom: report

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Telkom cannot pay executives R100 million and then fire 3,000 workers: union