Power utility Eskom’s executive remuneration was below the average of listed companies of equal size, Eskom said on Tuesday.
After the state-owned utility’s annual report showed that executive committee members were paid 109% more than they were paid last year, the utility pointed out that if like was compared with like, executive pay was only up 5%.
“For the executive team as a whole the increase was just under 35% and almost all of that was attributable to new members of the executive committee who joined either during the 2011 financial year or late in the previous 2010 financial year,” said Eskom spokesperson Hilary Joffe.
“So increases are almost entirely due to the filling of executive positions which had been vacant,” she said.
Eskom’s directors’ remuneration report reveals that R18.5-million was paid to executive committee members, compared to last year’s R8.8-million.
The biggest winner was human resources head Bhabhalazi Bulunga, who pocketed 507% more at R3-million, compared to last year’s R501 000.
Finance director Paul O’Flaherty took home 346% more at R4.9-million. This included a R1.3-million two-year retention bonus.
But Eskom explained that O’Flaherty’s previous year’s remuneration reflected only three months-worth of pay since he was employed from the beginning of January 2010. That means the increase compares three months with a full year of pay.
The same applied to Bulunga, who joined Eskom in February 2010.
Eskom’s annual report does not carry footnotes to the remuneration statements clarifying this issue, leading to the figures being read as year-on-year comparisons.
By comparison, chief executive Brian Dames was paid at R5.7-million, a mere 0.9% increase.
“If you compare like-on-like the pay packets of the execs that were on the executive committee for the full two years you will see that the increases are in the low single digits and that the pay packages are below the average of listed companies of equal size,” said Joffe, who noted that the packages were also generally below the average paid at other parastatals.
Joffe said the executive remuneration was decided by the board against a strict set of performance criteria.
In no way are these increases linked to Eskom’s profit, she said.
The main pillars of the performance criteria are keeping the lights on and efficiency savings. There are no bonuses awarded if the executive committee fails on these criteria. — I-Net Bridge