Eskom’s ‘share’ scheme in the balance

Eskom’s convoluted long-term incentive scheme for its top executives could see chief financial officer Anoj Singh paid as much as R6.5-million next year. If Brian Molefe returns as the company’s chief executive, he stands to earn a maximum of R10.7-million from the scheme.

But Molefe’s controversial, reversed pension payout could also see both get nothing.

In terms of the rules of the scheme, executives are paid out depending on the level to which Eskom achieves certain financial results; hard numbers that are closely monitored. But the scheme also gives the Eskom board discretion to “adjust” the payments depending on what the company has previously described as “gatekeeper conditions”.

The description of these conditions was left out of Eskom’s 2017 annual financial statements released on Wednesday. But in the 2016 annual financial statements (which are, in other respects, nearly identical to this year’s edition), Eskom said the conditions can be triggered by a qualified audit, and by “a significant PFMA contravention”, referring to the Public Finance Management Act.

The farcical sequence of events that started in December 2016, and during which Eskom attempted to pay Molefe an irregular R30-million pension, caused both a qualification of its audit and represented irregular spending under the PFMA.

On Wednesday Eskom confirmed that its pension fund, which operates at arm’s length from the utility, has refused to pay Eskom back the R30million, which Eskom had paid over to the fund to channel to Molefe, without a court order to do so.