Transnet executives earn multi-millionaire salaries. The bulk of those of you who are reading this article have salaries that would utterly pale in comparison to the following earnings by senior executives at Transnet and its subsidiary freight companies, extracted from the Parastatal Remuneration graphic published in a recent Business Times. And it’s pretty well odds on that you didn’t get an annual increase that matches any of those listed either. The rich list showed that Siyabonga Gama, CE of Transnet Freight Rail (TFR), earned R8 745 000 as a salary in 2011, with a bonus of R2 510 000, which totals at R11 255 000 for the year. His annual increase? A whopping 211.31% up on 2010. Karl Socikwa, CEO of Transnet Port Terminals (TPT), received R2 884 000 as a salary, and R6 107 000 as a bonus – totalling R8 991 000. A more modest annual increase of 42.46%. Tau Morwe, CE of Transnet National Ports Authority (TNPA), received a salary of R3 185 000, a bonus of R5 388 000 – totalling R8 573 000. Annual increase, 18.86%. Some other total incomes were: Richard Vallihu, CE of Transnet Rail Engineering (TRE), R9.238-m (+21.92%); Khomotso C. Phihlela, group executive of commercial at Transnet, R8.423-m (+18.5%); and Anoj Singh, chief financial officer of Transnet, R8.191-m (+71.54%). FTW worked out comparative figures for two chief executives in the private sector – and found that here the bonuses were very strictly related to that word “performance”. If that’s the case, does the TFR CEO deserve a bonus, was the question asked by several industry sources contacted by FTW. They also strongly suggested that Socikwa and Morwe were also not really “performing” although TPT and TNPA are big profit-generating operations. But, they stressed, this was largely because any cost increases are more than covered by an annual upward revision of their tariff levels – only restrained in recent years by the control imposed by the SA Ports Regulator. Our contacts point out that the operations display no annual increases in productivity or general efficiency, which continue to remain at a low level. But it’s a different matter in the private sector. Said one of the company’s annual reports: “The committee reviews bonuses annually and determines the level of the bonus based on performance criteria set at the start of the performance period. The criteria differ depending on the position of each executive and the division in which they operate and include headline earnings per share and divisional operating profit growth targets; return on invested capital targets; black economic empowerment and discretionary elements. This led to the following salary plus bonus figures for our two selected CEs. One received a salary of R4 901 000, and a bonus of R3 950 000, giving a total of R9 281 000. In the second case, the exec received a salary of R4 618 000 and bonus of R4 391 000 – totalling R9 009 000. But they both also got another benefit not granted to the Transnet CEs – a share rights issue each year. But again, this was not a free perk. It was again very strictly determined by the executives’ performance. Said the annual report: “Vesting of share rights is subject to performance conditions being met. The performance conditions and performance period are determined by the board on an annual basis in respect of each new grant of rights.” And this share rights issue brought the executives’ annual remuneration above par with those of Transnet. In the case of the first executive, his share rights were vested at the equivalent of R2 916 000, added to the previous total of R9 281 000 – bringing his total annual income up to R12 197 000. In the case of the second the formula read: R10 176 000 + R1 251 000 = R11 427 000. But it’s at lower level employees that the public sector is vastly overpaid. One in eight South Africans works for the public sector and earns on average 44% more than employees in the private sector, according to a recent survey released by the SA Institute of Race Relations (SAIRR). According to the survey, 13% of South Africa’s workforce is employed in the public sector. This equates to 1.61 million out of the total 12.8m people employed nationally. “In 2000, average public sector earnings were 12% higher than those in the private sector. In 2010, they were 44% higher,” said researcher Lucy Holborn. INSERT ‘One in eight South Africans works for the public sector and earns on average 44% more than employees in the private sector.’
