WILLIAM GUMEDE: Capping executive pay is the key to stop money-guzzling SOEs from ruining SA
Excessive remuneration at failing state-owned entities provides no incentive to become accountable
SA should cap the pay, bonuses and incentive schemes for executives and board members of state-owned enterprises (SOEs), who often receive huge remuneration packages and annual bonuses even when the entities are loss-making, fail to deliver services or are frequently bailed out with public funds.
Excessive remuneration at failing entities has not only given executives no incentive to become efficient, honest and accountable, but has added to the ballooning public debt burden. Many failing SOEs that had asked for bailouts from the central government simply used the funds to pay bonuses to executives. Though SOEs should in theory send their remuneration and incentives schemes to the departments overseeing them for sign-off, this rarely happens. Nor do SOEs often refer their remuneration policies to regulators or the National Treasury before implementation...