EDITORIAL: Why Brian Molefe’s R30.1m golden handshake offends
Brian Molefe worked for Eskom for only 20 months, from April 2015 to December last year, when he quit under a cloud after Thuli Madonsela’s state-capture report red-flagged his "friendship" with the Gupta family, who had scored hundreds of millions from Eskom.
Yet this weekend reports emerged that Molefe had left Eskom with a R30.1m "golden handshake" — a figure that, tellingly, neither Molefe nor the state-owned power company would refute.
Such a payment would be particularly obscene, given not only the circumstances under which he quit, but also because he did so voluntarily. Why should he get a golden handshake?
When questioned by the Sunday Times, Molefe said only that he was paid "what was due". At this point, it remains unclear if this was a pension fund payment, or a severance amount.
Still, in his (extremely short) tenure at Eskom, Molefe did exceptionally well personally. For the year to March 2016, lauded for his role in halting load-shedding, he was paid a not-insignificant R9.5m. Throw in the reported R30.1m, and it would work out at nearly R2m/month.
A golden handshake would have to be sanctioned by Eskom’s board, led by Ben Ngubane. However, the King code says that such "balloon payments" don’t qualify as good governance. Clearly, Ngubane’s board has little time for SA’s corporate governance standards.
It also suggests Eskom has little regard for the public, its customers, who are facing ever-escalating electricity costs. When Eskom goes cap-in-hand to the National Energy Regulator SA (Nersa) for more electricity price hikes, it will claim it kept costs in check. Molefe’s payout will be the stark rejoinder to that argument.
In some quarters, complaints have arisen that Molefe’s package is only being questioned by the elements of "white monopoly capital" (WMC) and "traditional media" which had no issue with the fact that Whitey Basson took home R100.1m (including a R50m bonus) shortly before he stepped down as CEO of Shoprite last year.
This comparison is flawed, for many reasons. At the most basic level, Basson worked at Shoprite for 45 years, building a company from one worth around R1m in 1980 into one worth R152bn when he stepped down. Investors made millions and, from scratch, the group now employs more than 140,000 people.
Molefe, in contrast, arrived at Eskom and, whether by virtue of the falling demand for electricity or his own nous, did manage to halt the load-shedding epidemic. But he was there for a fraction of the time that Basson led Shoprite, and, under his watch, a number of suspect deals were stitched together that benefited the Guptas.
And, crucially, while Basson was paid from Shoprite’s shareholders’ funds, Molefe was paid with taxpayers’ money.
The second inconvenient argument for anti-WMC proponents is that there was actually an almighty fuss made over Basson’s salary — both last year, and in years gone by. In fact, some of the "establishment media" dubbed it a symbol of "everything that is wrong with executive remuneration". Last October, 29% of Shoprite’s own shareholders voted against the company’s remuneration policy — a sign they weren’t willing to merrily sign off on mega-salaries for the top brass.
You can understand why the ideologues would ignore these facts, eager to distort the evidence to fit a lazy narrative. But the issues must be framed correctly if we are to have an informed debate about the state of our society, including its failings. Only then can the perversions, like Molefe’s purported payout, be properly debated.