CEO vs employee salaries at Eskom, SAA and other state companies

The private sector is often maligned for having massive salary inequalities between top executives and employees, but a look at the latest financial reports from South African state-owned enterprises reveals a similar picture in the public sector.

Despite financial constraints – and in some cases major losses – state companies still pay executives really well, and have high average salaries among their employees.

Notably, the pay gaps between CEOs and the average employees are just as big as you’d find among listed private companies.

We previously looked at similar data among the top 25 JSE-listed companies, which showed that the average employee earned R589,964, and the average CEO was paid R5.53 million.

Among nine prominent state owned companies, the figures are strikingly similar – average employee salaries at R524,710, and the average CEO salary at R3.27 million.

Average Salaries

Company Employees Total cost Average per employee
SABC 3 835 R2.78 billion R726 240
Eskom 47 658 R33.18 billion R696 170
Sentech 539 R368 million R683 260
Broadband Infraco 151 R102 million R677 480
South African Airways 10 706 R5.82 billion R543 810
Telkom 20 341 R10.9 billion R535 860
Transnet 58 828 R20.8 billion R353 570
Rand Water 3 339 R1.15 billion R344 710
SA Post Office 21 590 R3.48 billion R161 280

While private companies’ shareholders are increasingly scrutinising executive pay – and whether executives ‘deserve’ such high pay – government is often the only shareholder in SOEs, meaning these payment levels can only be challenged through the respective government channels.

An example of this problematic state of affairs was the recent saga at Eskom, where former CEO Brian Molefe almost walked away with a R30 million “early retirement” package – something that was only identified and overturned four months after it had been signed off by the board.

Even after the payment was rescinded, Eskom’s latest financial reporting shows that Molefe was still paid R8.9 million for eight months’ work at the group.

Salary gaps are also slightly problematic at some SOEs. South African Airways, despite making billions of rands in losses, paid its previous acting CEO a salary of R5.9 million in the 2015/16 financial year – 11 times more than the average employee.

At Rand Water and Transnet – even though these companies are profitable – the CEOs were paid 15 and 20 times more than the average employee, respectively. These pay gaps are on the same level as some of the less egregious so-called ‘over-payers’ in the private sector.

Despite this, however, public company salary gaps are still a far way off from those seen in the private sector. The average payment gap among the top 25 companies on the JSE was 100 times – skewed significantly by the 1,300-times gap seen at Shoprite.

Company CEO salary CEO salary as % of total Pay gap
Transnet R7.4 million 0.04% 21
Rand Water R5.1 million 0.40% 15
Eskom R8.9 million 0.03% 13
South African Airways R5.9 million 0.10% 11
SABC R3.6 million 0.10% 5
Telkom R2.6 million 0.02% 5
Broadband Infraco R2.7 million 2.60% 4
SA Post Office R538 000 0.02% 3
Sentech R1.2 million 0.30% 2

 


Read: The state companies running on empty in SA

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CEO vs employee salaries at Eskom, SAA and other state companies