Question No. 1472
Mr PJ Groenewald (Freedom Front Plus) to ask the Minister of Public Enterprises:
(1) What (a) basic salary, (b) fringe benefits and (c) fixed bonus were agreed upon in respect of a certain person's appointment in 2007 (details furnished);
(2) With what (a) percentage and (b) actual amount have his (i) basic salary, (ii) fringe benefits and (iii) fixed bonus increased in each year since 2007;
(3) Whether a performance agreement was included in the salary package agreement that was concluded with him; if not, why not; if so, what criteria were applied in measuring his performance as chief executive officer?
Reply:
1. (a to b) At appointment date (1 May 2007) the chief executive's total guaranteed remuneration was R3,850 million. Subsequent to his appointment, Eskom replaced its remuneration approach for managers from a "salary plus benefits" to a total guaranteed package basis. Benefits such as pension fund and medical aid are then structured within the total guaranteed package.
(c) There are no fixed bonuses. Bonuses are based on an individual's performance over 12 months.
2. (i) Increases were awarded in terms of Eskom's remuneration policy to reward executives at the median of the market as follows:
* Increase of seven percent to R4,119,500 with effect from 1 October 2007 (similar to the percentage increase awarded to all F-band employees during the October 2007 annual increase period)
* Adjustment of 15.31 percent to R4,750 million (median of market) with effect from 1 April 2008 (after 12 months in office)
* Increase of 8.84 percent to R5,170 million with effect from 1 October 2008 (annual increase period)
(ii) Eskom does not distinguish between salary and benefits for managers, therefore, benefits such as pension fund and medical aid are included in the above total guaranteed package amounts.
(iii) There are no fixed bonuses. Bonuses are based on an individual's performance over 12 months. Based on this principle, the following bonuses were awarded since 2007:
* 31 March 2007: short term incentive bonus of R1,103 million
* 31 March 2008: the chief executive officer antecedent divested himself of any right to receive a short term incentive reward for that year
* 31 March 2008: long term incentive bonus of R681,446
* 31 March 2009: board deferred the allocation of all bonuses for this financial year.
3. A performance agreement is concluded on an annual basis and includes the following criteria:
* ensure business sustainability of Eskom
* ensure reliable supply to all South Africans
* support the developmental objectives of South Africa
* ensure that the future power needs for South Africa are adequately provided for.
Issued by: Department of Public Enterprise
25 September 2009
Source: Department of Public Enterprise (http://www.dpe.gov.za/)
