Telkom’s bosses received huge pay hikes in 2013, despite deepening financial woes at the telecommunications group.
Former group CEO Nombulelo Moholi, who left Telkom in March, took home slightly less money than she did in the prior year — a total of R11,6m, from R12,1m before — but this figure is skewed by a restraint payment of R3,4m received in 2012 and other payments received in 2013, making direct comparison difficult.
Chief financial officer Jacques Schindehütte also took home roughly the same as he did in 2012, namely R8,4m. But he was paid a R4,5m sign-on bonus in 2012, which means his 2013 pay — which included a “settling-in allowance” of R1,2m — effectively rose by 33%.
Meanwhile, members of Telkom’s 33-member executive management team received a cumulative increase in remuneration of nearly 60% in the 2013 financial year. And many members of the group’s executive committee also got big pay hikes if the impact of retention bonuses paid in 2012 is excluded.
Telkom paid R128,8m to the 33-person executive management team in the year to 31 March 2013, an increase of 58,5% over the R81,2m it paid the team in 2012, when it had one fewer member.
The figures are included in Telkom’s 2013 annual report, published on Friday. They show that the 33-strong executive management team — whose members the report does not name — received fringe and other benefits totalling R50m (up by more than 250% over 2012) and short-term incentives of R13,9m (up from zero in 2012).
TechCentral was unable to reach Telkom investor relations head Nwabisa Piki on her mobile phone on Friday for details on why the numbers had risen so sharply.
The average pay to each member of the executive management team was almost R4m, a figure that analyst Irnest Kaplan of Kaplan Equity Analysts has described as sounding “rich”.
Kaplan says he suspects that a lot of money was paid to retain top management, but the size of the increase “certainly raises eyebrows”, especially in light of Telkom’s poor financial performance.
Remuneration paid to members of the group’s executive committee, meanwhile, fell sharply between 2012 and 2013, but only because large, once-off retention payments offered in 2012 skewed the numbers.
Telkom Business MD Brian Armstrong — who was installed as group chief operating officer subsequent to the financial year-end — saw his total pay fall from R10,5m in 2012 to R5,7m in 2013. However, his 2012 retention bonus was R6,7m, which means his pay effectively rose by 50%.
Attila Vitai, who was appointed in November 2012 to head Telkom Mobile, was paid R8,5m in total for the five months he worked at Telkom during the 2013 financial year, although this figure included a sign-on bonus of R5,5m. If he leaves Telkom before October 2015, he will have to repay the R5,5m. His guaranteed package for the five months was R1,8m.
Other executive committee members whose total pay went down year on year (but who received effective increases) were:
- Deputy chief financial officer Deon Fredericks, from R7,9m to R5m, but once a 2012 retention bonus of R3,1m is excluded, he received an effective increase from 2012 to 2013 of about 4%.
- Consumer services and retail MD Manelisa Mavuso, from R8,3m to R3,8m, but he received an effective increase of about 33%.
- Human resources head Thami Msubo, from R4,6m to R4,1m, but he received an effective increase of about 11%.
- Wholesale and networks MD Bashier Sallie, from R9,8m to R4,5m, but he received an effective increase of about 29%.
- Regulatory and corporate affairs chief Ouma Rasethaba, R5,4m to R3,5m, but she received an effective increase of about 17%.
Controversial former Telkom International MD Motlatsi Nzeku was the only member of the executive committee to take home more money in 2013, thanks to a R13m “retirement settlement” he received to leave the group’s employ.
Nzeku received more in 2013 than former CEO Moholi. He was paid R13,7m in total, up from R3,8m in 2012. — (c) 2013 NewsCentral Media
- See also: Telkom’s Nzeku paid R13m to go away
