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Parliamentary question on Eskom Bonuses

3 April 2008

A couple of weeks ago, we highlighted the issue of Eskom senior staff being paid huge bonuses despite the energy crisis the country was facing. The DA submitted a parliamentary question about the performance contracts, and the question and answer are appended below.

Unfortunately, the minister has taken a very narrow interpretation of the question and hidden behind the confidentiality of performance contracts. He refuses to give any information at all about the kinds of things that are considered in evaluating performance (appropriate long-term planning and ensuring a reliable and suitable quality coal supply would be two key performance areas, one would think).

Mr C M Lowe (DA) to ask the Minister for Public Enterprises:

(1) With regard to Eskom’s past three annual reports in which it was revealed that its top management was paid a total of R143 million, including R57 million in bonuses, what are the relevant details regarding how agreement on these bonuses were reached;

(2) whether these bonuses were tied to any performance targets; if not, why not; if so, what targets?


Reply:

(1) The amount referred to includes directors’ fees and also restraint payments. Part of the bonuses, although paid in 2005, was for the period 2000 to 2005.

(2) Performance bonuses are paid in instances where an individual’s performance or contribution towards the overall objective of the enterprise exceeds the target level of performance set for particular individual .

Individual performance targets are, as terms and conditions of contract, confidential. The Minister of Public Enterprises does, however, agree annual performance targets with the Board of Directors of an enterprise in its Shareholder Compact.

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