A snap survey has shown that, although he only earned R2.5 million in the last financial year, Vox CEO Douglas Reed earned more than his counterparts when comparing salary as a percentage of revenue.
He was followed by Telkom CEO Reuben September and then MTN CEO Phuthuma Nhleko, who earned the most in monetary terms, again.
Nhleko was recently in the media for earning almost R20 million in the year to December, which includes a bonus of R13 million, a basic salary of R6.5 million, retirement benefits of R385 000 and other benefits of R75 000, according to the annual report.
Last year, Mabili Search said he was at the top of the overall telecoms and IT remuneration list after earning a total of R16.3 million, while the previous year, he was the leading earner in the telecoms space.
However, Aileen Williams, executive of operations at staffing company Renwick, says packages at the top level appear to have stabilised after a period of significant growth. Renwick Talent, the executive search company of the Kelly Group, believes this is partly due to the economic climate as well as a maturing approach to executive pay.
“Reports show CEOs' short-term incentives have come under pressure with the current market conditions, and the medium-, short-term bonuses for CEOs dropped slightly,” says Williams. However, to retain top talent during periods of uncertainty, companies will need to look at more highly incentivised remuneration structures.
MTN has a market capitalisation of R226 billion and turned over R102 billion in the year to September. Spokesperson Nozipho January-Bardill says: “The MTN Group cannot comment on this matter.”
Telkom CEO Reuben September, who heads up a company that turned over R56.3 billion and has a market capitalisation of R17.7 billion, earned a total of R19.1 million for the year to March 2008.
Ajith Bridgraj, Telkom's senior specialist for media relations, says this included annual remuneration of R3.5 million, a performance bonus of R3.4 million, a retention payment of R10 million, an eight-month acting allowance, as well as the vesting of 6 549 shares allocated in 2004. He says all these items were fully disclosed in the 2008 annual report.
Retention plan
In January 2009, September was allocated 52 919 shares as part of a restraint of trade agreement. This share allocation will be reflected in the financial year to end March.
“The restraint agreement means the CEO is prevented from competing within the communications industry for two years after leaving the employ of Telkom,” says Bridgraj. “The retention payment is in place for a period of three years. If the CEO leaves the company during this time, this amount will be paid back to the company.”
Bridgraj says the Telkom retention programme, “for our senior executives, is designed to retain and motivate high-calibre talent in an incredibly challenging business environment where critical skills retention is crucial”.
However, the salaries are benchmarked against the top 40 companies listed on the JSE, says Bridgraj. This is done to “avoid paying more than is necessary and to ensure Telkom offers competitive packages”.
“Performance-related elements of the remuneration constitute a large proportion of the total remuneration package of the chief executive officer and are specifically designed to align his interests with those of shareholders and to give such executive directors incentives to perform at the highest level,” says Bridgraj.
Vodacom's annual report for 2008 did not disclose individual remunerations, but the board earned a total of R86.5 million, of which R15.3 million was earned by directors of subsidiaries. Vodacom turned over R48.2 billion to the end of March last year and has a market capitalisation of R81.8 billion.
Reed, who is out of the country and could not be reached, earned R2.5 million for the year to August. This included R540 000 in bonuses and R2 000 in other benefits. Vox, which has a market capitalisation of R676 million, turned over R1.847 billion in the year to August.
Huge Group CEO James Herbst did not earn a salary during the 2008 financial year, which ended last February and is the latest available information. The company did not provide an explanation in its annual report. For that year, the company turned over R243 million. It has a market capitalisation of R89 million.
Related stories:
MTN's Nhleko is top ICT earner
MTN tops pay stakes
Share
