Telecommunications

SA telcos that pay the most

Staff Writer

 ·28 Apr 2015

CEOs from SA telco companies are earning between 20 and 70 times more than their average employee payout – but employees in the sector aren’t earning too poorly either.

The biggest pay gap exists at MTN Group, where CEO Sifiso Dabengwa was awarded over R28.1 million in the 2014 financial year.

MTN has approximately 22,000 employees across the group, and spent R8.84 billion on salaries and bonuses in the year – paying an average of R401,727 per employee.

This means Dabengwa’s pay was 70 times more than the average employee – far higher than the 38x average in the telco sector.

This gap is half the 141x gap in 2013, when Dabengwa’s salary hit R48 million.

Both MTN and Altron – home to Altech – pull the average higher, with the latter’s CEO, Robbie Venter, drawing a salary almost 50 times larger than the average employee.

In the 2014 financial year, Altron paid R4.68 billion in salaries to its 12,904 employees – averaging R362,678 per person.

Venter’s salary was also the second-highest in the sector – R17.7 million.

Highest average salaries

Embattled power utility Eskom made waves in 2014 when it was revealed that, on average, employees were paid well over half a million rand amid a financial crisis.

Then-CEO Brian Dames drew R15.4 million over the same period, which is 28 times higher than the R557,000 average.

Looking at the telco sector, Vodacom offers the highest average pay.

Vodacom Group’s 2014 report indicated it had 7,225 employees and returned R4.61 billion to them through salaries and bonuses – leading to a group average of R637,924 per employee.

CEO Shameel Joosub’s salary for the year was R12.98 million – 20 times higher than the average, and the smallest pay gap in the sector.

The table below shows telco companies’ average salaries. Eskom has been included for context.

Average salaries

Pay gaps

CEO pay as % of salary spend

According to research conducted by Mergence Investment in 2014, Shoprite has the biggest pay gap of all companies listed on the JSE, with CEO Whitey Basson earning 725 times more than the average employee.

According to the research, South Africa sits with the 5th highest average pay gap in the world, after the USA (1st), Hong Kong (2nd), Germany (3rd), and the UK (4th).

The group noted that, given the size and scale of the companies on the JSE, “the amounts that are paid to executives are small relative to the total salary bill of the company and to the operating expenses of the company”.

“This incentivises corporate boards and shareholders to spend to obtain the best management teams.”

In context of the SA telco sector, executive salaries as a percentage of total salary spend is relatively small, except for Blue Label Telecom where far fewer people are employed.

Wealth disparity was a major focus in 2014 when charity organisation Oxfam highlighted that it would take 228 years for the world’s richest man – Bill Gates – to spend his fortune at $1 million a day.

The group noted that the gap between rich and poor is rapidly increasing, and economic inequality has reached extreme levels.

Mergence’s research also found that the pay gap between CEOs and employees in South Africa has shown an upward trend in the past five years.

“It is important for shareholders to engage company management seriously on this issue to attempt to mitigate the risks posed by the high levels of income inequality within South Africa, both to the long-term safety of their capital as well as to South African society as a whole,” the group said.

More on salaries

MTN CEO’s massive R28 million salary

How to clamp down on executive pay

South Africa’s massive wage gap