Women barely getting a look-in
OUTGOING Eskom CEO Brian Molefe, who resigned from the energy parastatal under a cloud in November, was one of the wealthiest directors at stateowned companies in 2015, although that would place him no higher than No 131 on Who Owns Whom’s Rich List of wealthiest directors in the private sector.
Molefe’s R13.133-million in 2015 just pips that of BHP Billiton director Jacques Nasser, who took home R13.130-million.
Molefe resigned after the release of the public protector’s State of Capture report, which highlighted “a distinct line of communication between Mr Molefe of Eskom, the Gupta family and directors of their companies”.
“These links cannot be ignored as Mr Molefe did not declare his relationship with the Guptas,” the report said.
Molefe’s remuneration in 2015 comprised salary and benefits of R8.3-million from Transnet, where he was CEO until April, when he was seconded to Eskom. His salary at Eskom was R4.9million without benefits. He steps down as CEO in January.
Former Telkom chief financial officer Jacques Schindehütte’s R18.8-million in earnings in 2015 put him at the top of the pile for public sector directors. Reasons for his suspension in 2013 remain a mystery. He quit in August 2014, but his remuneration was included in the 2015 Telkom financial year. The government owns 39.76% of Telkom, which is listed on the JSE.
In the private sector, consumer, financial services and mining bosses dominate the top 10 of income earners. Among them is outgoing Shoprite CEO Whitey Basson, whose R100-million remuneration package drew criticism earlier this year.
Excessive executive pay in a country where socioeconomic disparities are vast continues to raise concern.
Laurence Grubb, MD of Khokhela, a remuneration consultancy, predicted a slowdown in the rate at which guaranteed executive and director pay was increasing when the King 4 codes on governance take effect in March.
“We are going to see a lot more transparency and clarity around CEO and executive pay in terms of what they are going to be measured on and what they were rewarded for.”
A survey of growth in CEO remuneration between 2009 and 2014, published by Khokhela last month, showed an above-inflation 7% increase on average. CEOs hired in the period received an average 11% increase.
“So you can see the cost of buying in a new CEO is significantly higher,” Grubb said.
Next year, guaranteed pay increases might rise by between 6% and 7% on average, he said. Trade unions might request a higher hike.
“Typically, unions are going to negotiate harder for 8%, maybe 10%, in areas where they felt they’ve been held back.”
The 2016 Rich List of listed directors has Bernard Fornas, the outgoing joint-CEO of luxury goods producer Richemont, leading the pack with earnings of R103.1-million. Fornas is followed by Richard Lepeu, fellow joint-CEO of Richemont, with R95.6-million, and Investec Asset Management CEO Hendrik du Toit with R86-million.
The huge pay packets that directors take home annually still favour men, who outpace their women counterparts irrespective of the sector in which they operate.
Matshepo More, chief financial officer of the state-owned Public Investment Corporation, is the only woman listed among the top 20, earning R5.37-million in salary and performance bonuses in 2015. She is followed by Development Bank of South Africa chief financial officer Kameshni Naidoo, with R4.98million in pay and a bonus.
Gill Marcus, the former Reserve Bank governor, is next at No 27, with a modest R4.83-million, which comprised R2.6-million in remuneration and about R2-million in fringe benefits and
We are going to see a lot more transparency and clarity around CEO and executive pay
payout for a cooling-off period.
The R4.7-million package of her successor, Lesetja Kganyago, put him at 29th on the list.
In the private sector, Old Mutual group finance director Ingrid Johnson, ranked 26th, earned R33.8-million in 2015. Her salary was R12.1-million and she was awarded R15.4-million as a performance bonus and R2-million in benefits.
Another woman who featured relatively near the top of the list was Lizé Lambrechts, ranked 34th, who stepped in as Santam CEO in January last year from her previous role as Sanlam Personal Finance CEO. She earned R31-million, including R20.34-million from Sanlam.
Grubb cautioned companies against discriminatory pay practices based on gender or race following new legislation on equal pay for equal work.
“There are more and more cases being taken to the CCMA for unfair pay. That also applies to executives.”