Eskom defends pay increases

Eskom rejected accusations that it had granted inappropriate salary increases to executives.

The state-owned entity released its annual results on Monday revealing a 109 percent increase in executives' salaries for the financial year ended March 31, 2011.

"Four of the executives whose pay packages are listed in Eskom's Integrated Report for 2011 joined Eskom only during the 2011 financial year, or towards the end of the 2010 financial year," Eskom said in a statement.

"Their 2011 full year packages therefore compare to pro-rata payment during 2010.

"Comparing like with like, those executives who were in place throughout both financial years saw their pay packages increase by an average five percent or less."

Finance director Paul O'Flaherty joined in January 2010, and his pay for the full 12 months of 2011 was R4.9 million, compared to R1.1 million for three months of financial year 2010.

Executive director for human resources Bhabalazi Bulunga joined Eskom in February 2010. He was paid R3 million for the full 2011 financial year, compared to R501,000 for two months of the financial year 2010.

Two people only joined the executive in the latest financial year -- the divisional executive for corporate affairs Chose Choeu and chief commercial officer Dan Marokane.

Executive incentives were not linked to Eskom making a profit, but were linked to technical performance indicators and efficiency savings.

"A qualifier condition for executive bonuses is that Eskom must prevent rotational load shedding caused by shortages of generation capacity. There has been no such load shedding since April 2008," Eskom said.

The parastatal said when compared to similar entities, its executive salaries were "towards the lower end of the norm".

On Tuesday, the Democratic Alliance called the 109 percent increase in executive pay "wholly inappropriate within the context of the significant tariff increases that Eskom has enforced".

On Monday, O'Flaherty said Eskom's 29 percent revenue increase to R91.4bn, was driven primarily by the 24.8 percent tariff increase imposed in 2010.

The DA said it would write to the ministers of energy and public enterprises to call on Eskom CEO Brian Dames to justify the salary increases to the Parliamentary portfolio committees on energy and public enterprises.