DM168

POLITRIX

Who wants to be a millionaire? The top 10 best-paid government jobs in South Africa

Clockwise from left: Xolile George, André de Ruyter, Makhosini Msibi, Dube Tshidi, Edward Kieswetter, Sizwe Tati, Japh Chuwe, Madoda Mxakwe, Mlambi Booi, Jenitha John (centre). (Photos: Gallo Images, Bloomberg, Vecteezy, iStock)

Given the ways in which poorly performing state-owned entities have been looted for financial gain, top government official remuneration raises serious questions about whether these salaries can be justified.

In what may be the best-paid job in the South African public sector, Road Traffic Management Corporation (RTMC) CEO Makhosini Msibi received remuneration of almost R9.3-million in the 2020/21 financial year. This is far higher than the annual salary of the President (just more than R3-million), the Chief Justice (about R2.9-million) or a provincial premier (about R2.3-million).

At a time when the Zondo Commission is making damning findings about the ways in which poorly performing state-owned entities (SOEs) have been looted in South Africa’s recent past for financial gain, the figures raise serious questions about whether these salaries can be justified.

In late 2021, the International Monetary Fund expressed concern about the “continued worsening performance of SOEs” in South Africa. The accounting period in which state executives raked in multiple millions was one described by the Auditor-General as being characterised by regressing audit outcomes owing to “weak controls”, with “financial and performance management” flagged as a particular concern.

Salaries should be pegged to turnover and staff numbers

Guidelines on public sector remuneration published by the Department of Public Enterprises (DPE) in 2018, and not updated since, state that the most important criteria for determining leadership pay within state entities are the volume of annual turnover and staff complement. In other words, the bigger the budget and the number of employees, the higher the salary the relevant state executive can expect to earn.

Yet two of the bodies on our top 10 list of the best-paid jobs in government reported revenue of under R400-million for the 2020/21 financial year, and employ fewer than 125 staff. By way of comparison, the country’s biggest SOEs have tens of thousands of employees on their payroll.

The CEO of the Independent Regulatory Board for Auditors (Irba), Jenitha John, took home a total package of more than R6.4-million for just eight months’ work. In the same financial year, the Irba reported total revenue of just R190-million, with only 82 employees.

John benefited from a termination payoff of R3.5-million after being let go early, in February 2021. Irba is also only 30% government funded – but the wisdom of the audit watchdog’s high executive salaries is nevertheless called into question by the fact that the body told the courts in May this year that its current funding model was “unsustainable”.

Another minnow on the top 10 list is the Road Traffic Infringement Agency, which paid its CEO, Japh Chuwe, almost R4.5-million despite recording a relatively paltry R348-million in revenue for the same year, with 123 employees.

Chuwe is possibly the most controversial CEO on the list, ending up being fired in November 2021 after findings of “serious maladministration” by independent forensic investigators. He is also one of the state executives who has benefited from handsome bonuses over the years. In the 2019/20 financial year, Chuwe received bonuses totalling more than R5.5-million.

Bonus bonanza for state CEOs

The biggest bonus paid out to a CEO on our top 10 list over the 2020/21 financial year went to the RTMC’s Msibi, who received a “performance bonus” of almost R3.7-million.

The remuneration guidelines of the DPE state that “short-term incentives” – bonuses – should be benchmarked to performance. In the case of Msibi, the Automobile Association expressed particular outrage over his bonus, given that “the RTMC has failed to fulfil its core mandate of reducing road deaths in South Africa”.

In addition, the DPE salary guidelines state that “a qualified or adverse audit opinion, such as a disclaimer”, should negate the payment of executive bonuses.

Although the RTMC eventually received an unqualified audit for the year in question, auditors note in the body’s annual report that the financial statements initially submitted for auditing “were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records”.

This was also the case for the country’s digital agency, Sentech. Auditors stated that “material misstatements” in its financial reporting had to be corrected. Sentech CEO Mlamli Booi was paid a combined performance bonus and “allowances” amounting to R1,048,000.

It was also the case for the National Housing Finance Corporation, with CEO Sizwe Tati taking home a bonus of R2,544,000 despite auditor concerns, including the fact that “effective and appropriate steps were not taken to prevent irregular expenditure”.

Not all the CEOs on our top 10 list received bonuses. For Eskom, the annual report notes that no bonuses are payable to employees, “given the operating loss for the 2021 financial year”, and that no bonuses have been paid since 2018.

One of the most common arguments in defence of relatively high pay for state executives is that private sector salaries for equivalent roles are so generous that the government has to be prepared to pay well for top talent.

Private sector comparison

Bodies such as Eskom and the South African Revenue Service (SARS) are vital to the successful functioning of the South African economy, so they require the best possible minds in leadership.

This is a point acknowledged by the DPE salary guidelines, which nevertheless state that government remuneration “may not exceed the market median”.

A report by financial services firm PwC on SA private sector executive pay over the 2020/21 financial year found that the median salary for CEOs of companies on the JSE during this period was R5.17-million.

This figure drastically rose when analysing the top 10 JSE companies, however. For these “super caps”, median CEO salary over the same period was R24.1-million.

The median package taken home by the state CEOs on our top 10 list was about R6.1-million, by comparison. An executive headhunter who asked not to be named told DM168 that some of the positions on the list would be compensated far better in equivalent private sector positions.

Citing the role of SARS Commissioner and its salary, for instance, she said: “In the private sector, this package would be low for this size of responsibility … The total package would be at least double this, probably even more.”

Corporate pay expert Jeremy Bossenger, director of BossJansen Executive Search, told DM168 that it was difficult to directly compare public and private sector salaries, owing to the differences in CEO incentives.

“Most JSE-listed CEOs are on salaries of between R3-million and R10-million as a base, but share options, bonuses, etc, can take them to 10 times this amount,” Bossenger said.

Crucially, however, “this is strongly linked to performance”.

It is this aspect of government pay that tends to provoke the greatest outrage: that state executives can take home such high salaries even when the organisations they lead are performing poorly.

Eskom’s CEO, André de Ruyter, pocketed more than R7.1-million in the same year that the electricity parastatal recorded a loss of almost R19-billion – to say nothing of the blackouts wreaking havoc on the economy.

The SABC’s top executive, Madoda Mxakwe, took home R5.7-million when the state broadcaster reported a net loss of R530-million. South African Local Government Association CEO Xolile George was paid close to R5.8-million, yet the latest reports find that six out of every 10 local municipalities in South Africa are not financially sustainable. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25. 

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All Comments 16

  • Is part of the problem not that SA society as a whole has a crisis of priorities? Most normal people that are drawing a salary know that they first have to do their work and do it properly, according to acceptable standards, before they get their normal monthly salary. The idea is getting paid AFTER the work has been properly delivered. That is why, when one starts to work in a job, you only get paid at the end of that month and if you have only worked half of a month by then, you then get paid only half month salary. Which is more, a job is about more than just getting money; life is also about the experience and skills acquired when doing the job, and the satisfaction of knowing that you are contributing to society. I am of the opinion that it is time for the leaders of our society to start to promote this truth, and that they must have more appreciation for these values.

  • Thank you, Rebecca, for this timeous reminder that the Freedom Struggle was NOT fought on behalf of the People of South Africa. It is abundantly clear now what the ANC’s meant when they referred to “a redistribution of wealth” way back in the ’90s.

  • There’s nothing more damning that seeing these numbers in a country ripped apart by corruption and stupid waste … is there no more shame amongst these ” public officials “? No wonder that all I’m completing are Financial Immigration Allowances…

  • These obscene salaries of these fools is one thing. Please consider for a brief moment that our AVERAGE government worker is paid over R500,000 per year!!! We pay a few administrators more per year than we ALL pay nurses teachers police COMBINED. And yet, the nurses teachers police continue to vote for the same clowns that feather their fellow clown cadres’ pockets. At some stage I run out of sympathy.

  • A fundamental question is, the huge income disparities, in many countries but here in what claims to be a vaguely socialist / social-democratic society. Similarly, that Trade Unions demand large pay rises when millions of their “comrades” have no job income at all. Solidarity…?
    Fairness is supposed to be a universal quality. Being reasonably well off, I would not mind paying a bit more tax, especially in hard times such as post Covid. (Here ignoring the hefty argument by many people to avoid all tax on the grounds that much of it is lost to incompetence plus corruption!)
    The huge bonuses in the private sector are also often obscene: tens of millions of dollars in the USA. Just how many yachts and Ferraris can one person use? In a world full of hunger,..
    We say often in Norway, that this could be stopped by ONE vote in parliament, by introducing a Gini index for public salaries, and by a cap on private bonuses in the form of 100% tax (with the various sub-conditions necessary).
    The usual argument is that if you want the top people, you have to pay them what they could get in another country. This should be rejected. Fine. let the greedy people go somewhere else!
    By all means, put more sense into the present system, performance based and so on; but where are our values? Where are the supposed egalitarian values of the ANC?
    My professor in France was a life long communist. He continued to live all his life in a council flat. That is worth respect.
    Dream on, Chris!

  • Very poor article displaying no understanding of performance measurements of a CEO relative to what is required by the organization she/ he runs.

    • I cant see the quality of performance deteriorating too much (maybe some improvement even) in those posts if we found new University graduates to fill the positions at 10% of the pay.

  • I would say De Ruiter has earned his money. The fact the grid hasn’t collapsed is a miracle delivered by De Ruiter and a core of dedicated Eskom employees.

  • In general, the salaries paid to government employees is the biggest problem that the treasury sits with. Another remnant of anc cadre deployment and AA policies.

  • Performance bonuses when chaos and dereliction reign? How or who decides on these bonuses. In a country where the majority are struggling and many go hungry, it is obscene. These salaries are just a legal way to loot the country. This loot is distributed for favours and silence, I’m sure. I will vote for any party that does away with this waste.

  • South Africa is a great case study on why SOE’s are a terrible idea and why the private sector should be allowed to provide services on a competitive basis. If I can have reliable, affordable electricity at all times I wouldn’t care if the CEO earns tens of millions.

  • South Africa’s multitude of politicians and bureaucrats are overpaid, and do not stand up to a cost-benefit analysis. State capture began with cadre deployment in the civil service after the election of 1994, Zuma and the Guptas just accelerated the process.

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