Business

Crackdown on parastatals' salaries applauded

Staff Reporter

Trade unions Satawu and Numsa have welcomed the suspension of pay increases for chief executives and board members of parastatals.

Trade unions on Wednesday welcomed the suspension of pay increases for CEOs and board members of parastatals, saying it was long overdue.

“We share his [Public Works Minister Malusi Gigaba’s] great concern that the remuneration generally of executives is quite high,” the South African Transport and Allied Workers’ Union (Satawu) and the National Union of Metalworkers of South Africa (Numsa) said.

“It doesn’t contribute to bridging the inequality gaps between the highest paid and the lowest paid,” Satawu said, quoting Gigaba.

The union said it would use these “immoral and excessive” salaries paid to executives at state-owned entities to convince its members to fight for big increases.

“Their current pay continues to imitate those in the private sector. Satawu is fully supportive of the decision taken by the minister.”

‘Deplorable’ salaries
Numsa echoed these sentiments, saying salaries paid to CEOs in public and private institutions were “deplorable and an insult” to other public representatives and workers who earned far less.

Gigaba told Parliament’s standing committee on public accounts of his decision to suspend pay increases for CEOs and board members of parastatals until a remuneration policy had been put in place.

“The decision we have taken is not to increase the remuneration of non-executive directors until we finalise our views on these,” Gigaba was quoted saying by the Times on Wednesday.

“The same applies to the chief executives of the companies.”

Gigaba reportedly took issue with the R10-million paid to Transnet Freight Rail CEO Siyabonga Gama in incentives and bonuses while he was suspended.

Incentives
Gama was suspended in September 2009 and fired in June 2010. He was reinstated in February last year. In light of the Gama issue, Gigaba said incentives paid to executives of state-owned enterprises should be reconsidered.

“We have to find a formula that allows us to be able to explain with a great degree of comfort the incentives that people get, which must be linked with performance.”

According to the Times, Gigaba said state-owned entities were battling to compete with the private sector on salaries, making it difficult for them to attract the best brains.

“The private sector keeps pushing up salaries and [this] puts pressure on state-owned companies,” Gigaba said.

A presidential commission had been set up to review the remuneration of executives at state-owned companies.

‘The people shall govern’
Numsa said a remuneration policy must be developed through a democratic and public process, in line with the Freedom Charter injunction that “the people shall govern”.

Satawu, which has members in parastatals such as Transnet and the Passenger Rail Agency of South Africa, said if all measures announced by Gigaba were implemented wholeheartedly, the deepening crisis of poverty, unemployment and rising costs of basic necessities could be narrowed.

Gigaba’s decision was also welcomed by the Pan Africanist Congress. Spokesperson Mudini Maivha called on the minister to not only “drastically” reduce remuneration, but to also “clamp down tender processes where cronies are given business and deliver nothing, or less-than-quality services”.

“Many such parasites have walked away from state enterprises with millions in golden handshakes; been paid millions in performance bonuses where there were heavy losses and dependence on treasury bail-outs,” Maivha said.

“We hope the minister will walk his talk and act quickly and decisively.”—Sapa

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