The Democratic Alliance (DA) notes the release of Eskom’s annual financial results yesterday. Although the growth in profitability, and the stated intention to reinvest profits to ensure energy security, is a welcome development, the DA is concerned by the inappropriate increases in the salaries of senior executives at Eskom. The financial documents indicate an overall increase in executives’ salaries of 109% in the financial year ended 31 March 2011.
This means that the average executive salary at Eskom more than doubled in the past year. The human resources head, for example, received a 507% increase, whilst the finance director received a 346% increase. These represent massive increases in executive remuneration that are not in line with any private sector, or inflation-related, standards.
The DA believes that these salary increases are wholly inappropriate within the context of the significant tariff increases that Eskom has enforced. For some time now, Eskom has been under severe financial pressure – to the extent of forcing massive tariff increases onto consumers in order to service old debts, fund its build programme and remain generally solvent. Additionally, our energy security remains questionable, as Eskom is not able to guarantee sufficient energy production until the Medupi and Kusile power plants are both fully operational in 2018. This build project, and the enormous financial strain it has placed on Eskom, has necessitated the significant tariff hikes – which means that ordinary consumers have had to foot the bill for Eskom’s inability to properly plan and prepare for increased electricity demand in the country. Within this context, the massive executive salary increases are completely inappropriate.
Today, I will write to both the Minister of Energy and the Minister of Public Enterprises to call on Eskom’s CEO, Brian Dames, to justify these enormous salary increases to the Parliamentary Portfolio Committees on Energy and Public Enterprises.