Traffic agency’s board payments ‘outrageous’
● Within seven months of being appointed, board members at the Road Traffic Infringement Agency (RTIA) had been paid an average of R770,000 each. For this they attended 33 meetings — more than one a week.
The payments emerge in the RTIA annual report for 2020/21, which was tabled in parliament on Monday, several months after the deadline.
Remuneration experts who spoke to the Sunday Times said the number of board meetings and the amounts paid to five nonexecutive directors were “completely outrageous”.
The agency, recently exposed as having paid its executives an average of R7.5m in 2020, got another new boss this week when Matsemela Moloi was seconded from the Road Traffic Management Corporation for six months.
Moloi is the third person to take the helm this year. Dalian Mabula, appointed after the dismissal of CEO/registrar Japh Chuwe last October, was removed at the end of January. She was replaced by the organisation’s acting CFO, Caiphus Matjie, who ended his stint on February 28.
The annual report says the directors were appointed on August 6 2020 after a lengthy period in which the RTIA had no board.
Between then and February 28 2021 just short of seven months — the board met 33 times.
There were 11 ordinary meetings and 22 special meetings, as well as nine special events or engagements with the minister and deputy minister of transport.
The average payment works out at more than R23,000 for each board meeting.
The annual report shows board chair Bongekile Zulu was paid R767,304; Dorcas Khosa-Shikwambana R717,600: BM Ramokhele R865,454; TO Mtetsweni R667,074; and Prittish Dala R835,811.
In the same period a sixth board member, advocate Ivy Thenga from the National Prosecuting Authority, attended seven board meetings and claimed nothing. Contacted for comment, Thenga said she was no longer a board member and had nothing to say.
The Administrative Adjudication of Road Traffic Offences (Aarto) Act, which is the founding legislation of RTIA, says the board must determine “its own procedures for meetings and decisions” and should meet “at least twice per year or as often as may be required”.
Despite its intensive bout of meetings, the RTIA failed to roll out Aarto on July 1 2021 as expected by the transport minister.
It also failed to defend the legislation, resulting in the Pretoria high court declaring the act unconstitutional and invalid in January.
PwC’s latest nonexecutive director report, published last month, lists average annual fees for lower-quartile JSE-listed company board members as R339,000. The average number of board meetings across all industries is three a year.
Remuneration expert Mark Bussin, cofounder and chair of remuneration consultants 21st Century, described 33 board meetings in seven months with members earning R110,000 a month as “completely outrageous”.
He said the act’s guidance that meetings should take place “as often as may be required” was a case of poor wording and should contain a limit such as six meetings a year.
The number of meetings and payments, he said, were extremely excessive for a small government entity. “This kind of remuneration puts them close to what the guys at global multinationals are earning.”
By comparison, the Anglo American board of a chair and eight members meets nine times a year. Directors excluding the chair earn the sterling equivalent of R2.4m a year on average, according to the company’s latest annual report. Anglo employs 90,000 people, operates across the world and had revenue last year of $41.55bn (R640bn). In 2020/21, according to its annual report, the RTIA had revenue of R236.2m and employs 123 people.
Wayne Duvenage, of nonprofit civil action group Organisation Undoing Tax Abuse (Outa), also described the excessive number of board meetings and the high pay as “outrageous”.
“The board members of any organisation should not be meeting this frequently, nor should they be paid so much on average per meeting,” he said.
“This is indicative of abuse of revenues generated by a state organ. There can be no justification for these excessive payments, other than the abuse of power and possible patronage towards board members.
“Outa calls on the transport minister to investigate these payments and explain the reasons and rationality.”
RTIA spokesperson Fakazi Malindzisa said the intensive period of meetings was necessary because no board had been in place for 18 months, the 2020/21 audit had to be finalised and a number of forensic investigations were under way.
He said the board had inherited the organisation at a point where governance was critical and the agency needed to be stabilised.
Though the board had taken over after years of clean audits, he said it uncovered “a myriad of issues” that led to the auditor-general issuing the RTIA with an audit disclaimer, the worst possible rating.
This had subsequently improved, and the last reported audit saw the auditor-general improve the rating to “qualified”.
Malindzisa said all board meetings had been properly recorded and minuted, but some of the minutes remained confidential because discussions related to forensic reports that had not been finalised.