{"id":194164,"date":"2017-08-24T18:30:48","date_gmt":"2017-08-24T16:30:48","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=194164"},"modified":"2017-08-24T16:04:07","modified_gmt":"2017-08-24T14:04:07","slug":"ceo-vs-employee-salaries-at-eskom-saa-and-other-state-companies","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/wealth\/194164\/ceo-vs-employee-salaries-at-eskom-saa-and-other-state-companies\/","title":{"rendered":"CEO vs employee salaries at Eskom, SAA and other state companies"},"content":{"rendered":"

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.<\/p>\n

Despite financial constraints – and in some cases major losses<\/a><\/strong> – state companies still pay executives really well, and have high average salaries among their employees.<\/p>\n

Notably, the pay gaps between CEOs and the average employees are just as big as you’d find among listed private companies.<\/p>\n

We previously looked at similar data among the top 25 JSE-listed companies<\/a><\/strong>, which showed that the average employee earned R589,964, and the average CEO was paid R5.53 million.<\/p>\n

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.<\/p>\n

Average Salaries<\/strong><\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/th>\nEmployees<\/th>\nTotal cost<\/th>\nAverage per employee<\/th>\n<\/tr>\n
SABC<\/td>\n3 835<\/td>\nR2.78 billion<\/td>\nR726 240<\/td>\n<\/tr>\n
Eskom<\/td>\n47 658<\/td>\nR33.18 billion<\/td>\nR696 170<\/td>\n<\/tr>\n
Sentech<\/td>\n539<\/td>\nR368 million<\/td>\nR683 260<\/td>\n<\/tr>\n
Broadband Infraco<\/td>\n151<\/td>\nR102 million<\/td>\nR677 480<\/td>\n<\/tr>\n
South African Airways<\/td>\n10 706<\/td>\nR5.82 billion<\/td>\nR543 810<\/td>\n<\/tr>\n
Telkom<\/td>\n20 341<\/td>\nR10.9 billion<\/td>\nR535 860<\/td>\n<\/tr>\n
Transnet<\/td>\n58 828<\/td>\nR20.8 billion<\/td>\nR353 570<\/td>\n<\/tr>\n
Rand Water<\/td>\n3 339<\/td>\nR1.15 billion<\/td>\nR344 710<\/td>\n<\/tr>\n
SA Post Office<\/td>\n21 590<\/td>\nR3.48 billion<\/td>\nR161 280<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/th>\nCEO salary<\/th>\nCEO salary as % of total<\/th>\nPay gap<\/th>\n<\/tr>\n
Transnet<\/td>\nR7.4 million<\/td>\n0.04%<\/td>\n21<\/td>\n<\/tr>\n
Rand Water<\/td>\nR5.1 million<\/td>\n0.40%<\/td>\n15<\/td>\n<\/tr>\n
Eskom<\/td>\nR8.9 million<\/td>\n0.03%<\/td>\n13<\/td>\n<\/tr>\n
South African Airways<\/td>\nR5.9 million<\/td>\n0.10%<\/td>\n11<\/td>\n<\/tr>\n
SABC<\/td>\nR3.6 million<\/td>\n0.10%<\/td>\n5<\/td>\n<\/tr>\n
Telkom<\/td>\nR2.6 million<\/td>\n0.02%<\/td>\n5<\/td>\n<\/tr>\n
Broadband Infraco<\/td>\nR2.7 million<\/td>\n2.60%<\/td>\n4<\/td>\n<\/tr>\n
SA Post Office<\/td>\nR538 000<\/td>\n0.02%<\/td>\n3<\/td>\n<\/tr>\n
Sentech<\/td>\nR1.2 million<\/td>\n0.30%<\/td>\n2<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

 <\/p>\n

\n

Read:\u00a0The state companies running on empty in SA<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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.<\/p>\n","protected":false},"author":10,"featured_media":74874,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9880],"tags":[],"class_list":["post-194164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/194164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=194164"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/194164\/revisions"}],"predecessor-version":[{"id":194448,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/194164\/revisions\/194448"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/74874"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=194164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=194164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=194164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}