Gravy train for 11 Eskom bosses as workers get 5,5% wage hike.

DATE: 13 July 2005

Johannesburg Press release – for immediate release

Gravy train for 11 Eskom bosses as workers get 5,5% wage hike.

Yesterday , the conciliated wage talks between National Union of Metalworkers of South Africa (NUMSA) and the ESKOM power utility company hit another snag as the company wage offer remained unchanged at a disgusting 5,5% to all 29 000 workers. The union is demanding 8% wage increase in order to close the wage gaps. The union is also demanding a two year agreement. The 5,5% wage offer by the company flies in the face of 11 managers and directors receiving 70 million in pay packages. The Eskom CEO pay packet rose significantly to total R13 million for the 15 months to end-March this year, from R4,98 million in the 12 months to end 2003. It is also sad that only nine divisional managing directors will divide R56,8 million amongst themselves. Last year alone Eskom directors presided over a 53% hike in Eskom profits. This year, Eskom profits stand at R5.2 billion. It must also be remembered that two years ago Eskom managers divided R176 million at the direct exclusion of workers. The total pay packet for the CEO is made up of an annual salary of R3,8 million, a performance bonus of 2,8 million and a once off payment of R4,2 million. If we compare these salaries with the ordinary worker who earns R46 000 per annum, it shows an expanding wage disparity. The parties will meet again in an arbitration process.

The Eskom pay policy is geared towards attacking workers while it is silent on the managers and directors who are paid fat cheques. The bonanza pay in multiple boardrooms that has been running since the mid -1990s shows no signs of abating. They gave themselves 300% salary hike whiles they want workers to accept a meager 5,5%. This is just unacceptable. We must mobilize workers to take action. The wage divide is growing. The money could be saved to create an extra 300 jobs at the company in the next three years. It is now apparent, the pay policy of inflation related increases is solely required to be adhered to by workers, while the Eskom managers and directors instead of tightening their belts loosen them. This double standard on the part of policy makers demonstrates that the Eskom CEO is not only a passenger but also the driver of the gravy train.

In this regard, the Eskom pay policy undermines economic growth and employment. It is informed by false premises regarding executive remunerations, worker’s wages and employment. Lower wages are a huge disincentive to the economy and have major negative effects for workers. High wages help in addressing apartheid wage gaps , poverty eradication goals , and stimulating local demand. We will never be convinced that managers should be paid lavish salaries and workers poverty wages. We will never close the apartheid wage gap if workers are paid low salaries. Against this background, we maintain that workers deserve a 8% wage increase. Any measure of success for the company is dependent on paying workers better.

(For further information please contact Dumisa Ntuli -@ (011) 689 1700 or 0829737282)