Multimillion-rand payments made to Telkom’s previously suspended chief financial officer Jacques Schindehütte has trade union Solidarity up in arms.
Top executives at Telkom have seen pay hikes at the company despite the telecommunication giant’s “turnaround” plan, which involves cutting thousands of jobs.
According to Telkom’s 2015 annual report, total remuneration for CEO Sipho Maseko jumped from R11,7m in 2014 to R12,3m in 2015. The report also indicated that Telkom’s current chief financial officer Deon Fredericks received total remuneration of R8,6m.
However, it is a payment of R18,7m to Telkom’s former CFO, Jacque Schindehütte, for the period ending 31 March 2015 that has prompted questions.
Schindehütte was suspended from Telkom in October 2013 and then retired in August 2014. Reasons for Schindehütte’s suspension have never been revealed by Telkom, while a disciplinary process brought against him was abandoned.
Schindehütte also previously denied that a R6m loan granted to him by Telkom was a key reason for his suspension. Schindehütte used the loan to buy shares in Telkom.
“Solidarity believes that Telkom could have paid the salaries of about 80 technicians for a year with the money paid to its suspended former chief financial officer,” said the trade union in a statement on Tuesday.
Solidarity’s head of the communications industry, Marius Croucamp, said the average technician employed by Telkom is said to earn about R20 000/month before deductions.
“Given the massive retrenchment process at Telkom, we are aggrieved that Telkom has squandered so much money that could have been used to keep experts in its employ. At meetings with Telkom we will once again warn the company to get its priorities right and to have its employees’ interests at heart,” Croucamp said in the statement.
Telkom’s 2015 annual report explains that Schindehütte received a short-term incentive payment of R1.2m for the 2014 financial year while his long-term incentive payments for both 2014 and 2015 amounted to R10,3m.
The report also said that Schindehütte earned payment for 25 accrued leave days of R656 181.
But the company has also further explained payments made to Schindehütte.
“Mr Schindehütte took early retirement prior to the finalisation of the internal disciplinary process that had been initiated related to personal misconduct,” said Telkom spokesman Jacqui O’Sullivan.
“The long-term incentive payments made to him were in line with the employment contract he had agreed to with Telkom. The terms of this contract, he was paid out the cash equivalent, since the agreement pre-dated the share scheme,” said O’Sullivan.
O’Sullivan further explained Telkom’s approach to remuneration.
“Telkom uses market and industry benchmarks to ensure employees are remunerated competitively. This is necessary in a highly competitive industry, such as the telecoms sector, where the growing number of competitors result in fierce competition between companies, to secure the best talent in the country,” she said. — Fin24
