A survey of corporate headhunters reveals that salaries of highly paid officials in parastatals are commensurate with those in the private sector, reports Philippa Garson
SALARY packages for highly paid officials in parastatals like the South African Broadcasting Corporation and Independent Broadcasting Authority are justified, say remuneration experts.
Recent allegations of squandering of government resources by IBA officials have prompted close scrutiny by politicians and the public alike of the salaries of those in top positions in the likes of the IBA, SABC, Human Rights Commission and Truth and Reconciliation Commission.
Outgoing broadcasting minister Pallo Jordan claims the SABC and IBA’s salaries are “market-related”.
But, while salaries in the corporate world are partly determined by performance and delivery, executives in key government or parastatal posts are not scrutinised in the same way. Experts in the remuneration field believe performance of high flyers in parastatals should be similarly evaluated.
SABC chief executive Zwelakhe Sisulu earns R460 000 a year; Gert Claasen, chief operating officer, earns R370 000; radio chief Govin Reddy earns R350 000; and Jill Chisholm, head of TV and TV news, earns R250 000. IBA councillors earn R320 000 and IBA chairpersons around R411 000 a year.
Top salaries in these parastatals are similar to salaries of ministers and provincial premiers, who earn on average R470 000 a year. Directors general earn R464 000, while deputy ministers earn in the region of R372 000 and the two deputy presidents, R681 000. The president himself earns R784 350 a year.
A director of a leading mining house or public company like Eskom can earn almost twice as much as the president, begging the question of whether salaries in the private sector are not grossly inflated.
Salaries in the Human Rights Commission and Truth and Reconciliation Commission are more in line with top-notch jobs in the development sector. HRC chairman Barney Pityana earns R183 432 a year and full-time members get R142 731. Commissioners on the Truth and Reconciliation Commission will be paid between R200 000 and R250 000 per year.
According to Ruth Underwood of Action Appointments, which headhunts for the development sector, a director of “a fairly large and stable NGO would earn a top salary of around R200 000 a year.”
Martin Westcott, MD of PE Corporate Services, which undertakes salary surveys and headhunts for government and the private sector, believes the SABC salaries are reasonable. “Even though most of the top jobs were filled by people without appropriate experience, their salaries are still not excessive for the responsibility demanded by the positions.” An executive heading up a “largish” corporation with a turnover of around R300-million a year could expect to earn between R400 000 and R500 000 a year, says Westcott.
However, a “risk factor” of around 20% would be built into this package, determined by the director’s performance — crudely measured against company profits — unlike a parastatal head who could merrily overspend and get bailed out by the Finance Ministry.
Michael Olivier of Sibson & Company (a subsidiary of Renwick) says a job equivalent to SABC chief executive in the commercial sector would be close on R700 000 a year plus an additional risk-related 25%. By comparison to government jobs, salaries like these may be high. But, given the mix of public and private components, criteria are not identical.
“My own opinion is they are not out of line. They are relative to jobs of the same size in commerce and industry. I have no problem with people earning large salaries if they are performance related.” Performance in the commercial world is far easier to measure than in organisations with a public function, however. “We need an independent body that does performance appraisal of public servants,” says Olivier.
Brian Love, director of Business Mentoring Centre, says that while these salaries are market related, they should be more closely linked to delivery. While it is difficult to draw comparisons between the IBA, essentially a monitoring or policing operation, and a private corporation, it is clear the institution is not delivering on its mandate, says Love. “In commerce and industry you get paid that kind of money when you deliver.”
Another problem plaguing parastatals like the SABC is overstaffing. “There are far too many civil servants and bureaucrats. The public outcry is around the total cost of employment. It is time the manpower count is brought in line with the private sector,” says Westcott. The gravy train, in his opinion, has more to do with overstaffing than overpaying.
Some companies doing placements and salary surveys for the government — including Hay and FSA Contact — are reluctant to divulge information which is the privilege of their “client”. They do, however, note that the government is beginning to introduce appraisal systems comparable with the market place in evaluating employees’ performances “and are beginning to move away from the system of automatic increases”, says Westcott. His company has been involved in introducing merit-based systems into the public sector.
Whether corporate-like appraisal systems for public officials are in place or not, it is still the function of Parliament to act as an effective public watchdog of the performances of those in key government and parastatal postions.
Richard Calland of the Institute for Democratic Alternatives’ (Idasa) Parliamentary Information and Monitoring Service (Pims) points to Parliament’s role in ensuring people employed by government are doing their job. “Parliament should be looking closely at parastatals too. They are spending public money.” The fact that they are a hybrid of public and private funds should call for even more scrutiny, he says.
In his view, drawing comparisons between private sector salaries with those of public office is counter-productive. “People who enter public life do so not because of the financial rewards, but because they want to make a contribution to the way their country is run.”
In a recent edition of Whip, Calland calls for MPs’ pay to be urgently reviewed. In his view, MPs are not being paid enough (R193 000) and are therefore vulnerable to corruption.