Former Telkom group CEO Sipho Maseko earned R34,199,625 for the nine months he served at the company from 1 April to 31 December 2021.
His remuneration included a basic pay package, short- and long-term share incentives, and a R10 million retention bonus, MyBroadband reported.
Shareholders raised concerns over the large retention payments Maseko received, which amounted to R20 million in cash over two years.
“The board considered it to be strategically important to retain Mr Maseko’s services for a minimum period of two years,” Telkom’s integrated report for the 2021/22 financial year states.
“The board remains of the opinion that the right decision was taken.”
Telkom’s board argued there were several key reasons they decided it was essential to ensure the company retained Maseko:
- Several of Telkom’s largest competitors were in the market for new executives.
- Certain strategic matters, including Telkom’s restructuring and the spectrum auction, were still underway.
Under the terms of the board’s retention agreement with Maseko, he had to remain at the company until 31 March 2022.
If he resigned during the retention period, he would have been expected to repay the gross amount, including the tax portion, up to the exit date.
Ironically, the board resolved in December that Maseko should vacate his post early, and Serame Taukobong took over as group CEO on 1 January 2022.
However, the Telkom board stated that Maseko remained in an advisory capacity until 30 June 2022 to help complete “selected strategic matters”.
In addition to his retention payment, Telkom also concluded a restraint of trade agreement with Maseko running for 12 months from his last day on 30 June 2022.
A taxable restraint amount of R32 million is payable on 1 July 2022.
“No restraint agreement was in place or concluded in Mr Maseko’s initial employment contract in April 2013,” the report stated.
“In the absence of a restraint of trade being concluded when Mr Maseko joined Telkom in 2013, and given the significant influence that he had as GCEO of Telkom over eight years, the Board agreed that it was in the best interests of the business to engage with Mr Maseko and agree on terms of a restraint agreement.”
Telkom’s executive remuneration disclosed in its annual report is summarised in the table below.
|Element||SN Maseko||S Taukobong||DJ Reyneke|
|Other benefits + retention bonus||R12,293 + R10,000,000||R6,146||R19,678|