Telkom will not again structure a contract with an exit package as generous as the one paid to former chief financial officer Jacques Schindehütte, board chairman Jabu Mabuza has vowed.
TechCentral revealed in July that Telkom had paid Schindehütte R18,8m in its 2015 financial year, despite the fact that he left its employ last August, just five months into the 2015 reporting period.
In the year ended 31 March 2015, during which time Schindehütte didn’t work a single day for Telkom as he was suspended, the former finance chief took home R6,5m more than the CEO, Sipho Maseko. His remuneration included R12,2m in “fringe and other benefits”.
At Telkom’s annual general meeting on Wednesday, Mabuza said bluntly that Telkom’s remuneration committee “does not support contracts of that nature going forward”.
He said the board was not admitting any wrongdoing, but said “it is an acknowledgment that the ex-CFO was paid in terms of the contract that he had. The point we are making is that we don’t have those contracts going forward. But there were contracts that were in place that were binding, and we paid.”
Mabuza added: “In my role as chairman, I will continue to ensure that Telkom adheres to the highest standards possible of corporate governance and performance.”
Schindehütte was suspended on 24 October 2013 and quit the group on 8 August 2014. A disciplinary process brought against him was later abandoned with no reasons given, with Telkom agreeing to allow him to retire from the board with full benefits accruing.
Neither Schindehütte nor Telkom ever revealed why he was suspended. However, he consistently denied that a R6m loan granted to him by the company, which he used to buy shares in the operator, was behind the suspension.
There was also talk at the time that he traded shares during a sensitive period. He bought R6m in shares just 10 days before Telkom published a trading statement that sent the share price rallying higher.
Schindehütte declined to comment on the share trade beyond saying that he would not have traded if he believed he had access to sensitive information about Telkom that had not already been shared with the market.
Schindehütte told TechCentral that he had been offered the opportunity to resign before being suspended, but doing so would not have been “congruent” with his “value system”. He said at the time that he respected the decision of Telkom’s board to institute disciplinary measures against him.
Telkom said previously that it had received a number of allegations against its former finance chief and that the board had tasked an independent legal firm to investigate them.
“A report was completed and presented to the board by the law firm. The board considered the report, applied its mind and took professional advice,” Telkom said.
“In October , the board determined that the fairest way forward was to provide Mr Schindehütte the opportunity to defend himself in a disciplinary hearing.” — © 2015 NewsCentral Media