Registered users can save articles to their personal articles list. Login here or sign up here

Bonus bonanza at Eskom – Average R88 000 per person

Bonus cost almost doubles to R4.2 billion.

Eskom staff got a huge bonanza on July 11 when their performance bonuses were paid out, at an average of R88 883.35 per employee.

On that same night the presentation of the utility’s annual financial results scheduled for the next day, were hastily postponed to assess the impact of the auditors’ qualified opinion.

It has since also come to light that the power utility on an alone-standing basis in fact showed a loss of R870 million for the year ended March 31 2017. The R1 billion profit it reported on Wednesday when the financial results were ultimately presented, was in fact a rounded up R888 million and was the group result.

The group consists of the power utility and also the Eskom Finance Company, Escap (a captive Eskom insurance company) and Eskom Development Foundation. The results of these other entities in other words boosted the power company’s loss-making numbers at a group level.

At the results presentation Eskom distributed a very brief document that only reported on “Eskom”, without differentiating between the group and the company. It showed a R1 billion profit. Members of the media were only given the full financial and integrated reports after the event.

The complete financial statements show that staff cost increased by around 13% at company as well as group level. When asked about the sharp increase at the presentation Eskom CFO Anoj Sigh said increased overtime payments as well as bonuses were contributing factors.

The financial statements show that the group paid a staggering R4.2 billion in bonuses, up 98% from the previous year. That means that on average the 47 658 employees received R88 883.35 each.

Eskom spokesperson Khulu Phasiwe told Moneyweb that the bonuses are linked to performance. Some divisions within Eskom that failed to meet its targets were penalised and received smaller bonuses than the rest of the staff, Phasiwe said.

At a company level – where the loss occurred – the cost for paying bonuses increased by R1.6 billion. That means that by decreasing the size of the bonuses by about 50% Eskom could have avoided reporting a loss.

The financial statements further show details of executive remuneration:

Executive

Short-term bonus

‘000

Long-term bonus

‘000

Total remuneration

‘000

Brian Molefe

2 110

8 871

Anoj Singh

1 879

7 238

Thava Govender

1 385

927

5 735

Matshela Koko

1 496

711

6 171

Sean Maritz

1 138

308

4 226

Abram Masango

1 290

436

5 364

Ayanda Noah

1 091

921

5 302

Mongezi Ntsokolo

1 346

1 055

6 263

Elsie Pule

1 105

677

5 216

Moneyweb earlier reported that Eskom’s performance scheme provides for certain “gatekeepers” that could affect an employee’s bonus amount even when he achieved all his predetermined targets. The annual report released on Wednesday does not disclose what the gatekeepers were, but last year it stated five measures. Two were safety related and the other three were making a loss, getting a qualified audit report and in case of significant transgressions of the Public Finance Management Act (PFMA).

If any of these “gatekeepers” are triggered, the board’s People and Governance committee has the discretion to reduce the bonuses by a percentage or even completely scrap them.

At the results presentation on Wednesday Moneyweb asked Singh how the bonuses were impacted by the “gatekeeper” conditions. At that stage it was not yet clear that Eskom recorded a loss at company level, but the news of the qualified audit report and two reportable irregularities which constitute non-compliance to the PFMA had become public.

Singh responded “he thinks” a penalty of 15% was imposed.

The People and Governance committee was also responsible for the resolution that resulted in a R30 million pension payout to Molefe. This payout was later reversed and is currently the subject of a court challenge.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

AUTHOR PROFILE

COMMENTS   16

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

These figures are literally unbelievable. Surely some mistake?

Bailout after bailout and ongoing increases passed onto the public – and the execs (with straight faces) blandly state that bonuses of 4.7 billion have been paid out. Add to this the wash of cash paid out on all the corruption dealings and the mind staggers. UN-EFFING-BELIEVABLE!!! If all this money had been saved and wisely utilised we’d likely be enjoying decreases in the cost of electricity.

And like ‘Mytake’ says below, the bonus payouts have not gone to the lower levels – it was probably 90% to the top 2 or 3 thousand execs and managers, which means that those folk got massive payouts.

Would luv to see a spreadsheet of bonus values paid out to different levels in Eskon coupled to the number of employees per level. Now that would be revealing!

It is for this reason that Eskom needs to enforce above inflation increases on users. Surely the bonuses must be funded from somewhere? Working for Eskom and you have landed on the jack pot.

Time for me to get of the grid. It’s clear eskom is there to plunder and expect the tax payer to foot the bill. Bonus for what? Medupi being 10 years late and 3 times over budget??? Yeah right.

A lot of this money will just go back into the pocket of Eskom itself via the PPF (public pension fund) and PIC (Public investment Corp.). Going back to some articles provided via Moneyweb; the PIC and PPF is major buyers of Eskom debt (almost the only buyers), acting as the back stop to the major shortfalls they have in their liquidity. I believe as an Eskom employee you are obligated to pay 13% of your salary towards the pension fund (40%) and in addition to the 13% contribution (say R100) 60% (R200) is also provided as a fringe benefit from Eskom as CTC. Thus a lot of the Eskom employees money has to go to the PPF and PIC and is just circulated back to Eskom via very Bad debt that they will never be able to pay back. There is a huge party going on for the Eskom employees, for now, however they will all crash and burn as their pension funds are being eroded and will eventually come to nothing..

Any thoughts?

This makes it harder for any of the ~48 000 Eskom employees, most of whom are likely to be salt-of-the-earth skoffelvolk, to remain objective and anti-corruption in their public or private thoughts, and so reduces the pressure on the real thieves. The skoffelvolk themselves become captured, even if just a little.

And in news just in – Zoomer was delighted at the Eksdom results saying: This is Eightity and five hundred and forty million for Athulle and Eleventy million for me.

What in heavens name is the reason for bonus payouts? Especially at SOE’s?

In my language that is known as stealing taxpayers money. THEFT! Simple as that.

R88 000 a person is highly misleading. The large majority of workers get a small token bonus, while the real crooks at the top keep the lions share for themselves.

Have heard Eskom employees are just about the best paid in the country and if memory serves me correct the average remuneration is north of 500k per annum.Even with Molefe and his ilk skewing things, the average Eskom employee is still at worst getting a 13th cheque despite the economy tanking!

Surely this cannot be true. I can not believe this has happened at a time like this when so many people are suffering financially. In a country with so much unemployment,this money could have been put to so many uses to set the unemployed up in business or to employ people to fix broken roads. Howick is a disaster with potholes everywhere.The only time you see the grass verges cut is on weekends and then you see them sitting under the trees. People overseas should see this and then see if they are prepared to invest their money in South Africa.

The Stink is getting bigger.

Is it fair for the Taxpayer to sustain this rubbish?

It is time for Government to step in and implement a Marshall plan, get rid of the deadwood, fire incompetent and corrupt management at high level.

Load All 16 Comments
End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be cancelled at any time.

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: