Eskom CEO pay vs performance

 ·3 Oct 2013
Money lighbulb

Eskom has endured many hardships over the past decade – from load shedding in 2008, the global economic crisis in 2009, to more recent pressures on the national grid and criticism from every sector.

The state-owned power company’s latest, and much-delayed project – the Medupi power station – has come under fresh criticism, as labour disputes, technical issues and manufacturer blunders have pushed the project months behind schedule, and at great financial cost.

However, when it comes to paying its executives handsomely, the state-owned power supplier isn’t shy in opening its coffers – even when things are at their worst.

BusinessTech looks at Eskom’s chief executive remuneration over the past decade, and weighs it up against how profitable the entity was in each respective financial year.

All figures below were taken directly from Eskom’s annual financial reports, from 2002 to 2013.

Eskom CEO salaries and profits from 2002 to 2013

Year CEO Salary Profits
2002 Thulani Gcabashe R3.97 million R3.70 billion
2003 Thulani Gcabashe R4.98 million R3.42 billion
2004 Thulani Gcabashe R6.49 million
2005 Thulani Gcabashe R6.56 million R5.20 billion*
2006 Thulani Gcabashe R5.20 million R4.45 billion
2007 Thulani Gcabashe R6.16 million R7.22 billion
2008 Thulani Gcabashe R7.76 million -R0.17 billion
2009 Jacob Maroga R4.96 million -R9.67 billion
2010 Brian Dames R5.69 million R3.62 billion
2011 Brian Dames R7.56 million R12.80 billion
2012 Brian Dames R8.28 million R13.25 billion
2013 Brian Dames R8.46 million R5.18 billion

* Profit over a 15-month period as Eskom restructured business

CEOs over the years

Over the past decade, Eskom has had three chief executives holding the reins at the company.

Thulani Gcabashe, who was appointed as CEO in 2002, had his employment contract expire on 31 December 2007 – during the company’s 2007/08 financial year.

Gcabashe’s successor, Jacob Maroga was appointed to take over the role from May 2007, meaning both chief executives were on the books for that financial year, earning R7.76 million and R3.91 million, respectively.

Maroga’s tenure at Eskom was short-lived, as the executive headed to the power company during its most trying time – namely the dreaded load-shedding period as well as the global economic crisis.

Maroga stayed on Eskom’s books until October 2009 – but was replaced by current CEO, Brian Dames, as early as February 2008. For the 2009 financial year, Maroga was paid R4.96 million and Dames was paid R2.98 million – this despite Eskom incurring a R9.7 billion loss.

Dames has seen Eskom through two of its most profitable years (2011 and 2012) since the losses of the last decade.

Eskom CEO salary 2002-2013

Eskom CEO salary 2002-2013

Eskom profits 2002-2013

Eskom profits 2002-2013

Ebb and flow

Eskom CEO pay over the past decade has remained fairly stable, with exception to the 2007 and 2008 period, in which load-shedding was prevalent, and in 2009, when the global economy was in deep trouble.

In 2004/05, Gcabashe’s pay totaled over R15 million; however, this was due to a restructuring of Eskom’s financial year, and reflected a 15 month period from 1 January 2004 to March 2005.

According to Eskom, in 2004/05 the company “rebooted” employment contracts for the new financial year, and in doing so had to fulfill the termination requirements attached to contracts which had not yet come to term.

This resulted in Gcabashe being paid R6.486 million for 2004 (restraint and termination payments) and R6.559 million in compensation for the 2005 financial year, under a new contract.

In the 2007/08 financial year, the company spent R11.7 million on executive pay (for both Gcabashe and Maroga) despite the loss of R170 million in profit – and 2009’s payout (for Maroga and Dames) totaled R8 million – the two highest payout for executives in the past decade, over the most troubled period.

Eskom profits vs Salaries 2002-2013

Eskom profits vs Salaries 2002-2013

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