Pretoria – Eskom has defended the increase in the payment of executives in the parastatal, saying this is a direct result of the company having filled vacant posts.
“The large percentage increases in total executive remuneration are almost entirely a result of this [recruitment] process. Four of the executives whose pay packages are listed in Eskom’s Integrated Report for 2011 joined Eskom only during the 2011 financial year, or towards the end of the 2010 financial year,” said Eskom on Wednesday.
Criticism was levelled against the parastatal, with some claiming that the increase in executive remuneration was inappropriate.
Eskom released its annual results on Monday for the year ended 31 March 2011, which showed a 109 percent increase in executives’ salaries. Eskom posted an R8.4 billion profit – a surplus of R3.6 billion.
The parastatal said it had filled several vacant posts on its executive committee in the last year and a half.
“Their 2011 full year packages therefore compared to pro-rata payment during 2010,” said Eskom.
Executives who were in place throughout the 2010 and 2011 financial year saw an average increase of five percent or less in their pay packages.
Four executives have joined Eskom since January 2010. Finance director Paul O’Flaherty joined in January 2010, and his pay for the full 12 months of 2011 was R4.9 million, compared to R1.1 million for three months of the financial year 2010.
Human resources executive director, Bhabalazi Bulunga, joined the entity in February 2010, with his full 12 months for 2011 remuneration at R3 million, compared to R501 000 for two months of financial year 2010.
Chief Commercial Officer, Dan Marokane, joined Eskom in January 2010 as divisional executive for Primary Energy and joined the executive committee in September 2010 when he was promoted to Chief Commercial Officer.
Chose Choeu joined the parastatal as divisional executive for corporate affairs in June last year.
Eskom added that the board determines the remuneration of executives in line with a range of performance criteria and with local and international benchmarks.
“Executive incentives are not linked to Eskom making a profit. They are linked to technical performance indicators and efficiency savings. A qualifier condition for executive bonuses is that Eskom must prevent rotational load shedding caused by shortages of generation capacity. There has been no such load shedding since April 2008.”
Given the size of the company and its importance to South Africa’s economy, Eskom strives to ensure the appointment and retention of talented executives, it said. – BuaNews
