The SA Reserve Bank sought on Tuesday to quell criticism that governor Tito Mboweni’s last two pay rises were excessive in view of the bank’s own inflation targets.
Mboweni’s current annual salary of more than R2,3-million was actually lagging behind, remuneration committee chairman Brian Gilbertson told reporters in Pretoria.
When the committee decided in December last year to grant Mboweni a nine-percent increase from April this year, his salary package lagged the market by about 16%.
”He will fall behind and drop back because we granted him only nine percent,” Gilbertson said.
When Mboweni was given a 12% raise in the previous financial year — a decision taken in December 2001 — his salary was estimated to be behind by about 18%.
Mboweni’s annual salary stood at R2,38-million after last year’s 12% increase.
President Thabo Mbeki will earn about R996 654 this year.
Some political parties and trade unions reacted angrily last week to news of Mboweni’s nine-percent increase for the year ended March 2003. They argued it was double the country’s inflation target.
The central bank has set the inflation target at between three and six percent for this year and the next.
Gilbertson reiterated on Tuesday that Mboweni was not involved in the determination of his salary or increases. The governor was also a member of the remuneration committee but always left the meeting when his own salary came up for discussion.
Briefing reporters before the start of the bank’s annual general meeting, Gilbertson said independent sources outside the bank helped to determine what the governor should earn.
Mboweni’s current salary was set by using as a guide remuneration in other senior positions in the country’s banking system.
”There are not a host of governors out there, but there are similar positions … at major banks,” Gilbertson said.
”We acquire information from the market place, relying principally on three sources of information.”
The committee also examined recent changes in salary packages in the market outside, as well as expected adjustments.
”In the third place, we look at the performance of the governor as perceived by the board and the remuneration committee,” Gilbertson said.
This was being measured against the mission of the central bank — formulating monetary policy and ensuring the country’s banking and financial system was sound.
”The guiding rule I have followed as chairman of the committee is that the package should be fair to the individual,” Gilbertson said.
Mboweni indicated on Tuesday he was not in a hurry to step down at the end of his current term in about a year’s time.
”All of us here still find our time at the central bank quite exciting — and will be willing to continue to perform our functions into the future if we would be asked,” he said. – Sapa