… As big pay cheques divide politicians and SOE bosses
The war on the salaries of politicians and parastatal bosses is not just political rhetoric, or a paranoid fantasy concocted by big earners. It is real and it is relentless.
President Hage Geingob’s decision to release the salaries of SOE bosses was received with mixed feelings.For the ordinary man on the street it was a great move as they will now know how much of their hard-earned cash is spent on CEOs despite poor performance by some parastatals.
But experts have warned that Geingob’s move “was a blind one” because it has the potential to pit ministers against the SOE bosses, who happen to report to them.
The anomaly of the salary scales is brought about by the fact that most of the SOE bosses earn almost double the ministers’ salaries, despite the fact that legally it is the prerogative of the minister to appoint SOE heads for those firms that fall under their ministries.
For instance, the heads of the Electricity Control Board (ECB) and NamPower both earn more than the minister they report to – Mines and Energy Minister Obeth Kandjoze.
According to salary figures released by the President this week, the ECB CEO earns a whopping N$2.6 million per annum while the NamPower MD earns N$2.3 million compared to Kandjoze’s salary, which is just over N$1 million per annum.
The average annual salary of the top 10 highest earning CEOs in the country stands at N$21.1 million, almost as much as the N$29.4 million raked in annually by the country’s 27 ministers.
Government has for long struggled to rein in the salaries of SOE bosses, who continue to exploit loopholes within he system to inflate their salaries.
A source, who spoke under anonymity, revealed that most SOE bosses would comply with the gazetted 2014 remuneration guidelines by adhering to the set basic salary threshold. According to the goverment gazette dated 31 December 2014, “bands for total guaranteed pay per annum inclusive of inflation of 6% “ excludes performance and incentives based pay . That is where the loophole is,” said the source.
“What they do is they inflate their benefits to between 40 and 50 percent of their basic salaries, thus making them non compliant in terms of the 2014 guidelines. Incentives for CEOs include annual bonuses, provident fund, medical aid, housing subsidy, company car, entertainment and telephone allowance, group life among others.
It is expected that the new remunaration guidelines will be presented to cabinet within the next month. The reforms will endeavour to regulate even the incentives which currently is open to interpretation and therefore it is abused.
Jumping the gun
Geingob now stands accused of releasing the parastatal bosses’ salaries in a bid to defend his own earnings.
The Presidency released the parastatal top brass fat cheques this week in response to media reports that the President, his ministers and his top advisers are taking home salaries in excess of a million dollars annually while the rest of the citizenry under the employ of the State continue to beg for salary increments.
The move, however, drew brickbats from the public who questioned whether the salaries of both politicians and SOE bosses are deserved, bearing in mind the questionable performances of parastatals and the current state of the economy.
The problems at SOEs are manifold and complex but one of the most basic structural problems remains the clear lack of accountability, feedback, and oversight.
Those SOEs that continue to perform below par continue to pay out bonuses to executives.
Even more worrying is that executives fail to perform or when they act inappropriately, action is seldom taken to resolve the situation.
Minister of Public Enterprises Leon Jooste seems to suggest that the process [of adjusting the salaries] is ongoing while the affected parastatal bosses seem shell-shocked with the announced salaries, which they argue are far-fetched.
Press Secretary Albertus Aochamub, however, could not be drawn into commenting whether Cabinet has endorsed the released salaries and referred questions to the SOE Minister when approached yesterday. “Please check with the SOE Minister they [SOE bosses] all submitted to them,” Aochamub said.
Jooste told The Patriot that although the salaries are approved in principle they still need to be tabled.
“The new Remuneration Guidelines have been approved in principle by the Cabinet Committee on Public Enterprises and I will now table them in Cabinet for approval after which they will be published. The new guidelines will be a complete departure from the existing ones and will for the first time introduce incentivised remuneration. Boards and CEOs will enter into legally binding performance contracts with key performance indicators and will only qualify for incentives once they achieve the targets,” he said. A fine totalling N$ 100 000 may also be payable upon transgression.
Jooste has been frantically pushing the country’s commercial public enterprises to improve performance by coming up with performance-based contracts, which are enshrined in his Hybrid Operation model that he calls the “game-changer” launched last year.
The hybrid model introduced by Jooste last year aims to remunerate parastatal heads in accordance to their performance and delivery while encouraging a culture of transparency and good corporate governance.
The Presidency released shocking salary ceilings for parastatals, indicating that Electricity Control Board Chief Executive Officer Foibe Namene, Motor Vehicle Accident Fund CEO Rosalia Martins-Hausiku and NamPower Managing Director Kahenge Haulofu are the highest earners – raking in N$2.6 million, N$2.4 million and N$2.3 million, respectively.
Some of those who are said to be smiling all the way to the bank include the bosses of DBN, NamPort, New Era, SatCom, Telecom, NUST and the University of Namibia, amongst others.
Ironically, while many of the parastatal bosses are respected intellectuals, criticism has been levelled against them that they have not done much to deserve their high remuneration in an era where most Government-owned companies survive on fiscal bailouts instead of making profits.
Some of the heads of parastatals, including Martins-Hausiku and New Era’s Audrin Mathe were quoted in the media questioning the authenticity of the figures released by the Presidency to the media, as these are deemed work-in-progress and not yet communicated to the recipients.
The notorious ones in terms of perennial begging from Government in the past have been TransNamib, Air Namibia, Namibian Broadcasting Corporation and Telecom, to mention but a few. This is despite the fact that their businesses have the potential to generate profit. According to Government Gazette released on 10 March 2017, deputy ministers are raking in N$788 366 in both salaries and allowances annually, while ministers earn N$1 089 185 annually and the Prime Minister is sitting pretty at N$1.36 million.
The gazette also revealed hefty packages for parliamentarians, and heads of Government institutions.
Meanwhile the State Owned Enterprises Chief Executive Officer’s Forum chairperson, Mathe, has refused to join the salary debate.
Mathe, who earlier this year during an interview with this publication said CEOs in Namibia are underpaid, said the forum is aware of the debate over salaries of SOE CEOs.
“The PE (Public Enterprise) CEO Forum is aware of the current debate about salaries of the PE CEOs. The Minister of Public Enterprises has committed to gazette the new salary framework once approved by the Cabinet at its meeting next week. We are in agreement with that principle,” he said briefly in response to questions sent to him yesterday.