South African Finance Minister Trevor Manuel has commented on the recent public debate on the 12% hike in pay for the governor of the central bank, Tito Mboweni, saying that the matter could be interrogated by the finance portfolio committee of the National Assembly.
But in reply to a question in Parliament from Democratic Alliance (DA) MP Bernice Sono about who took the decision to grant the increase and whether it would be reviewed in light of Mboweni’s expressed concerns about salary and wage increases that exceeded inflation, the minister said:
“The governor has expressed the correct view that we run the risk of escalating inflation if wage and salary increases are not compensated by productivity improvements, that is an increase in unit labour costs.”
“This matter can be pursued with the governor during his regular interaction with the Finance Committee,” said the minister.
He noted that at its December 2001 meeting the remuneration committee of the bank took into account that in terms of the actual packages of executives in the national market — not only commercial banks — the governor’s package lagged the market by 18,1%.
“Since the remuneration committee is a sub-committee of the (South African Reserve Bank’s) board, the board can mandate the remuneration committee to review the matter if this is deemed appropriate.”
Manuel said to date the board had made “no such indication and has not entered into discussions about the matter”.
Manuel’s comments follow strident criticism after it was revealed last month that Mboweni had received a 12% increase in his annual salary to R2,384-million and that it would rise 9% this year, far higher than the 6% upper limit of the country’s inflation target.
Manuel said the decision to grant the governor a 12% salary increase for the period March 2002 to March 2003 was made by the Remuneration Committee December 2001 meeting under the chairpersonship of Dr Marius de Waal, a then non-executive director of the board.
“As of 27 August 2002, the remuneration committee consisted of non- executive directors Brian Gilbertson (chairperson), Prof Mahvishnu Padayachee, Audrey Mokgabudi, Noluthando Orleyn and the Governor Tito Mboweni.
The secretary was Zodwa Matsau. However, it must be noted that the Reserve Bank governor is recused from the meeting during discussions about his salary,” added the minister. – I-Net Bridge