Stella Ndabeni-Abrahams. Picture: SIYABULELA DUDA
Stella Ndabeni-Abrahams. Picture: SIYABULELA DUDA

Communications minister Stella Ndabeni-Abrahams has defended the high salaries paid to SABC executives though the public broadcaster faces an uncertain future due to crippling financial challenges.

According to the SABC’s annual report for the 2018/2019 financial year tabled in parliament in September, the broadcaster’s CEO, Madoda Mxakwe, received a total pay package of R3.9m for nine months’ work. The remuneration package for SABC’s top executives including the CEO, CFO, COO and its board totalled R42.5m in the reporting period.

The broadcaster, which has a huge unsustainable wage bill, spends more than R3bn a year on the salaries of more than 3,000 permanent employees across all levels.

“The CEO is getting what he is supposed to get ... they [executives] have to be compensated in a competitive manner,” Ndabeni-Abrahams said during a question-and-answer session in the National Council of Provinces on Tuesday.

“We are confident that as we benchmark with the industry out [and] if we want our executives to perform to their level best they have to be compensated in a deserving manner and ... their turnaround plan is very clear on what needs to be done,” Ndabeni-Abrahams said.

She said the CEO’s and other executives’ salaries are in line with global trends.

Losses to continue

This comes as the broadcaster has recorded consecutive multimillion-rand losses over the years and now relies heavily on the government to survive. The government recently granted the SABC R2.1bn of the R3.2bn bailout it requested as part of a short-term turnaround plan. It will receive the outstanding R1.1bn once it meets various preconditions set out by the Treasury, including identifying some of its assets for possible disposal.

The SABC ended the 2018/2019 financial year with an audited loss of R482m. Losses have decreased over the past number of years from R1bn in 2016/2017, to R744m in 2017/2018. But indications are that it will continue to record losses for the foreseeable future after posting a R192.3m loss in the first quarter of the 2019/2020 financial year.

Despite the dire financial situation at the public broadcaster, Ndabeni-Abrahams suggested that there was no need to cut executives’ salaries. The SABC has previously planned to retrench staff across the board to turn around its poor financial state, but this route was blocked after Ndabeni-Abrahams’s intervention.

She said her department has made a commitment to appoint a chief restructuring officer who will monitor the cost-containment measures and ensure that “the taxpayers’ money that has been sent to SABC is well spent and indeed the public gets the service it deserves”.

Turnaround strategy

The minister also expressed confidence that the turnaround plan will ensure the financially sustainability of the broadcaster and to cut wastage. The plan includes addressing legacy and governance issues with the aim of recovering some money, and policy and legislative issues such as must-carry regulations: the SABC wants MultiChoice’s DStv bouquet to pay to carry its three channels. The SABC also wants the Independent Communications Authority of SA (Icasa) to look into the high costs of sports rights.

The last element of its turnaround strategy focuses on growing revenue, creating new revenue streams, cost-cutting and driving efficiencies.

Improving productivity of workers will be key in turning around the SABC, Ndabeni-Abrahams said. Therefore it has been agreed to conduct a skills audit and possibly retrain employees so that they are “responsive to the future broadcaster”.

She said she has requested the SABC not to rush to retrench workers but to consider other measures.

phakathib@businesslive.co.za