DIALLING UP A WINDFALL
Paying R219m to just three executives of Cell C, after the cellular operator narrowly avoided hitting the wall, seems a little rich
There are some distinctly unhappy staff at Cell C’s swish headquarters in Midrand who are fuming over disturbingly lavish payments made to CEO Jose dos Santos and his comrades in the executive suite.
A series of letters have been flying around in recent weeks between “representatives of 391 Cell C employees” and the board of the country’s third-largest mobile phone operator, which claims to now have 16.3-million subscribers
What sparked the exchange was Cell C’s financials for the year to December 2017, which, interestingly for a company that claims it wants to list within two years, are not on its website. Those accounts show how payments to executives vaulted more than fourfold last year — from R50.9m to R219.2m — at a time when staff say the business is slashing expenses in every other corner.
It means that of the R1.49bn spent on all 2,272 employees last year, nearly 15% went to just three people — Dos Santos; chief strategy officer Robert Pasley; and Tyrone Soondarjee, who resigned as Cell C’s FD in May.
Now, it’s certainly clear that, financially, good things happened for Cell C last year. For the year to December, a “recapitalisation” by Blue Label Telecoms (which ended up as a 45% shareholder) and Net1 UEPS (which ended up with 15%) injected R7.5bn into the company, which allowed it to reduce its net debt from an impossible R18.9bn to a merely steep R5.9bn.
Its revenue grew 7% last year to R15.7bn and it made a R267m net loss, if you strip out the one-off
What has irked staff too is that Cell C’s financials show it set aside R357m as a ‘success fee’ to certain executives