Cell C workers riled by bosses’ bonuses
Executive directors netted emoluments worth R219m in 2017 from R51m the prior year
Cell C employees say they are frustrated after learning that the mobile operator’s executive directors saw their pay more than quadruple in 2017.
The company’s financial statements for the year ended December show that executive directors netted emoluments worth R219m in 2017, from R51m the prior year.
Additionally, the value of performance and retention bonuses that accrued to all employees more than doubled to R652m. This included a "success incentive" awarded to executives who secured the operator’s recapitalisation deal with Blue Label Telecoms and Net1.
A letter to chair Kuben Pillay from 391 "concerned and frustrated employees" says the pay hikes and bonuses go "directly against the values that were held in high regard ... namely the value of fairness".
The employees say in a letter dated August 24: "During the bonus payout for 2017, we were advised the company could not honour payments of full bonuses and … a lesser amount was paid … We were advised this was due to tight budget and financial constraints."
Staff say in a second letter that they will approach the government, civil bodies and unions if their demands, which include an investigation into bonuses, are not met.
Cell C told Business Day last week that while it had not met internal targets for 2017, it nevertheless paid discretionary bonuses to junior staff this year. Bonuses relating to the recapitalisation deal, which will be paid over a number of years, were agreed to by shareholders who exited the business on completion of the deal. Blue Label and Net1 were informed of the payments.
"All incentives, schemes and structures received the necessary board and shareholder approvals and are aligned with guidance from the Cell C remuneration committee, based on best practice and proper governance." They were also shown in Cell C’s financial statements.
A representative from Cell C’s black empowerment investor, CellSAf, said "no bona fide shareholder structure" was approached on pay packages.
CellSAf’s stake in Cell C fell from 25% to 7.5% because of the recapitalisation deal. "We have not been approached at any time after August 2017 to approve anything, let alone remuneration … Needless to say, CellSAf wouldn’t have approved such obscene payments."