Telkom doubles executive pay as job cuts loom

Telkom, which is embroiled in a fight with unions over a plan to cut jobs, more than doubled its executive directors’ wage bill in in fiscal 2015.

Total compensation for Chief Executive Officer Sipho Maseko rose 5.1% to R12.3 million, former Chief Financial Officer Jacques Schindehutte received R18.8 million compared with R6 million a year earlier, and Schindehutte’s replacement was paid R8.7 million, according to the Pretoria-based company’s annual report for the year ended March 31, released Monday.

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Total pay for the three was R39.8 million compared with R17.7 million for executive directors in fiscal 2014. Net income declined 17% to R3.3 billion, Telkom said June 8. The operator declared its first dividend since 2011 after cutting debt by 92%, even as voice revenue shrank.

Telkom, about 40% owned by the South African government, is seeking to cut approximately 4,400 jobs, or more than 20% of its workforce, through voluntary severance and early retirement. Following a dispute with unions including Solidarity, a labor court on July 8 ordered Telkom to retract its restructuring proposals and reach a settlement with the workers’ groups before proceeding with its plan.

Schindehutte was suspended in October 2013 and opted to take early retirement in August last year.

For the five months of fiscal 2015 that he was still an employee, he was paid a guaranteed salary of R6.5 million and fringe and “other benefits” of R12.2 million, according to the annual report. This included short-term incentive payments from fiscal 2014, long-term incentive payments for 2014 and 2015 and 656,181 rand for 25 accrued leave days.

- Bloomberg