Mr Speaker, a debate on executive remuneration is raging internationally and locally, and it is a very welcome debate.
It is well known that the Department of Public Enterprises has set up a remuneration panel to review the salaries of senior executives and the boards at the state-owned enterprises under our domain.
I am very happy to engage in this debate. But what I find disturbing in engaging in this debate, is when people do sloppy arithmetic, just look at figures and then throw things out into the public domain. I am referring to the allegation that was put out into the public domain that an 83% salary increase was enjoyed by senior executives last year. It got corrected by Eskom. Even the media published those corrections, but it still comes up in this House in the form of a question. I asked the questioner to please provide me with the basis of the calculation, and all the questioner could provide me with was a newspaper article which predates even the correction made by Eskom.
Let me assure this House that there is no consideration of an 83% increase for senior executives of Eskom for this year. That was the question that Dr Van Dyk asked me. Let me further assure the House that there was not an 83% increase for senior executives at Eskom.
Let me explain where the confusion arose. In the previous financial year, no Eskom manager received a performance bonus. No bonus was paid out; it was withheld. There were certain targets put for senior management to achieve. Senior management achieved that target in December, and their retrospective bonus was then paid out to them in relation to that target. Therefore, when the figures were reported in the annual financial statements, two performance bonuses were recorded for that one year: One was the retrospective one and the other was for this year. What happened was that commentators just seized those figures and used them to make their calculation of an 83% increase. In actual fact, when you correct this and allocate the bonuses to their proper years, etc, you will then be faced with an 18,35% increase.
All senior executives, as is common elsewhere in all big corporations, receive their remuneration on the basis of their salary, which includes pension, medical aid, etc, and on the basis of a performance bonus. So, you have to ask questions about how much the performance bonus has increased from the previous year as well as how much the salary has increased from the previous year. What tends to happen ... [Time expired.]