MTN SA says it will not make any additional performance bonus payments to employees for the 2014 financial year.<\/p>\n
This follows a protest staged by disgruntled employees late last week at the company’s head office, demanding performance-linked pay.<\/p>\n
MTN’s local unit has struggled amid an increase in competition and a 36% decline in interconnect revenue due to lower mobile termination rates (MTRs), the group noted in its previous reporting.<\/p>\n
Earlier in March, the mobile operator reported a 3.9% drop in local revenue for the year ended December 2014, to R38.9 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) slipped to R12.5 billion, from R14 billion before.<\/p>\n
MTN said that in a meeting held on Wednesday 11 March to hear employees\u2019 grievances around the payment of 2014 performance bonuses, the group undertook to provide feedback to employees on their bonus proposals.<\/p>\n
The group said in a statement on Monday (16 March):<\/p>\n
“MTN SA confirms that there will be no additional performance bonus payments to employees for the 2014 financial year.<\/p>\n
This decision follows a request by general and supervisory level employees for the company to consider granting them an ex gratia payment or higher bonus payment, as they deem the payment of 4% of their annual pensionable salary insufficient.”<\/p>\n
“As with any company, MTN SA is expected to deliver a certain level of growth in order to declare a performance bonus. In the previous financial year, MTN SA did not deliver the required growth and thus was unable to declare a performance bonus.”<\/p><\/blockquote>\n
It said that while MTN is one group, the underlying operating companies, including MTN SA, are independent of each other and each has its own board, expectations and responsibilities to shareholders.<\/p>\n
“During 2014, MTN Group continued to work hard to deliver on its vision. The 2014 financial year however, proved to be one of the most difficult for the Group.”<\/p>\n
“As a result, across the 22 operating companies evaluated for performance bonuses, only 15 entities qualified for payments and seven, including MTN SA, did not qualify for any performance bonus payment,” MTN said.<\/p>\n
Explaining the payment of the 4% payment to employees, MTN SA chief human resources officer, Themba Nyathi said: \u201cMTN is fully aware of the diminished line of sight at the lower levels and in lieu of this, ensures that there\u2019s a guaranteed portion of any performance bonus.”<\/p>\n
“That is, even if an Opco does not qualify for a bonus payment, this doesn\u2019t prejudice general and supervisory staff at job levels 1 and 2.”<\/p>\n
“As a result, in a year when a bonus is declared, the first 4% of the calculated bonus percentage is the guaranteed 4%. In the absence of a performance bonus being declared, which is the case for MTN SA; employees at these levels are guaranteed a 4% payment. This is a group-wide policy, and applies across all MTN operations,\u201d Nyathi said.<\/p>\n
More on MTN<\/h3>\n
MTN SA grows subscribers amid earnings drop<\/strong><\/a><\/p>\n
Solidarity calls for CCMA intervention on MTN retrenchments<\/strong><\/a><\/p>\n