Tel: (011) 339-4911
Fax: (011) 339-5080/339-6940
Email: donald @ cosatu . org . za
For comments on the website email: firstname.lastname@example.org
COSATU statement on Brian Molefe's R 30 million handshake from Eskom
COSATU has noted with deep concern Eskom's R30 million golden handshake to Mr Brian Molefe, who is yet to clear his name regarding his alleged involvement in corruption, as highlighted by the State Capture report. He is yet to give answers about his involvement in the GUPTA's contract with Eskom.
However, COSATU does not support selective outrage because the golden handshakes have been a feature in this country without much fanfare from the many people, who are now angry about the one awarded to Brian Molefe. COSATU has been consistently arguing against these obscene executive remunerations for a long time. We still remember that many people said little about one of the record golden handshakes, which was a payout of R232-million in 2001 to Coleman Andrews despite SAA incurring losses.
Some of the people complaining now, were happy to defend and explain away the obscene and vulgar amount of money that was paid to Shoprite's CEO, Whitey Basson, who was paid over R100m in the year to June 30 2016. While Mr Basson was being rewarded with over R100m; many workers at Shoprite were experiencing a reduction in incomes, benefits and job security. There is no difference to what was paid to Brian Molefe and Whittey Basson, they are both overpaid and over praised individuals, who are taking credit for the work that has been performed my thousands of underpaid workers.
COSATU finds the whole thing unacceptable, whether it is done by the public or private sector. This is unacceptable because when workers are retrenched their severance pay is only limited to at least one week's pay for each completed year of continuous service, provided that the worker does not unreasonably refuse other employment with the same employer or with another employer.
Executive remuneration is based on the so-called law of supply and demand or the invincible hand. It has been argued that since there is dearth of skills and high demand for managers these managers should be paid more than ordinary workers. This is unacceptable as it amounts to justification of payment of slave wages and is not linked to performance.
Even if it were to be linked to performance the productivity is due to workers on the floor and not the CEO. Therefore, there is no explanation on why salaries of executives are high compared to ordinary workers on the shop floor.
COSATU demands that parliament should regulate executive remuneration of both public and private companies. SA has high wage inequality and prevalence of low pay. According to the national minimum wage report over 6.7 million workers earn below 3500 and over half of the workforce earns below 3500 and 4.6 million do not even earn RR2400 per month.
The recent tax increase of the highest marginal tax rate to 45% is a step in the right direction but is not enough. There should be wage ceilings for executives. This would not result in this CEO's leaving as executive pay is not performance linked.
According to the 2014 Labour Research Service report on 89 listed companies' executive remuneration, average minimum wage for workers in 2013 was calculated at R3738 or R44856 per year whilst the average for executive directors was R5.5 million rand and for CEO's 6.8 million. The average salary increase in 2013/14 was 8% for ordinary workers, 14.0% for executives and 16% for CEO's. Interestingly the CEO's were paid these salaries and received these average salary increases despite a fall in profits.
This outrageous and morally repulsive considering that we have more than 9 million people , who are unemployed and over 17 million on welfare. This is both unacceptable and unsustainable.
Issued by COSATU
Sizwe Pamla (National Spokesperson)
Tel: +27 11 339-4911 Direct 010 219-1339
Mobile: 060 975 6794