‘Eskom execs should #paybackthebonus’

IF MISCONDUCT FOUND

Recent exposes about fraud and corruption at Eskom should trigger a “gatekeeper clause” that would see long-term bonuses reduced or forfeited, says PFMA expert advocate Ivan Herselman.

Eskom executives’ remuneration consists of three components. First is a guaranteed package: a fixed cash amount and compulsory benefits, he explains.

In the previous financial year, then Eskom CEO Brian Molefe earned a R6.9 million guaranteed package and CFO Anoj Singh R3 million. Ten exco members who don’t serve on the board jointly earned R18.5 million. Some had left Eskom in that reporting period. Matshela Koko, suspended as acting CEO following procurement irregularity allegations, earned R3.2 million.

Second is a short-term performance bonus, linked to targets.

In the previous financial year, Molefe received a R2.4 million short-term bonus and Singh R1.4 million.

Other executives earned between R790 000 and R980 000 (Koko).

Third is the long-term incentive, rewarding performance over three years according to predetermined targets. Eskom’s 2016 integrated report says this “covers financial and nonfinancial targets, e.g. ensuring Eskom’s business sustainability, reliability of supply to all South Africans and that SA’s future power needs are adequately provided for, and supporting SA’s developmental objectives”.

Neither Singh nor Molefe received long-term bonuses (they hadn’t been in service three years). Other executives jointly got over R8 million (Koko R847 000).

In its 2016 annual report, Eskom explains executives are awarded performance shares that only vest three years later if performance targets are met.