SAA: R5 million on six-month contract for CFO excessive for failing airline

Issued by Alf Lees MP – DA Deputy Shadow Minister of Finance
26 Jul 2018 in News

While the DA welcomes the disclosure of the remuneration packages of South Africa Airways (SAA) executives by the Minister of Finance, Nhlanhla Nene, to the Standing Committee on Finance (SCOF), it is shocking to learn that the financially troubled airline is spending millions of rands on salaries for executives on short-term contracts.

Robert Head, who was appointed as CFO on 1 April 2018 on a six month contract, is set to earn R5 511 000, about R900 000 a month. The multi-million rand remuneration packages of his and other executives can be accessed here.

The latest disclosure, however, stops short of providing SCOF with the full executive pay structure at SAA, despite an undertaking by the CEO, Vuyani Jarana, to do so within seven days when he appeared before the committee on 7 June 2018.

It is unacceptable for SAA to be selective in releasing information on executive pay. Indeed, the CEO has failed to provide details of his own remuneration package by only providing the details of executives “appointed in recent months”. Jarana was appointed as SAA CEO and the state-owned entity’s chief accounting officer on 1 November 2017 and South Africans have a right to know how much he is being paid. The committee has waited 49 days for the answer.

The reluctance of SAA’s new board and executives to provide Parliament with information on SAA, an SOE that that has cost the taxpayer R15 billion in bailouts over the past 12 months, has serious implications for Parliamentary oversight. It is a regression which works against the removal of the culture of impunity that existed through the warlord regime of previous SAA Chair Dudu Myeni.

There is no doubt that if SAA is to be saved the executives employed must be very capable people who have the required skills and experience in order to “fix” SAA. However, the limited number of remuneration packages that have been disclosed seem to be excessive and the questions that need to be asked and which we will be asking are;

  • What process was followed to identify and recruit the best possible persons?
  • In the recruitment process, were all prescripts of law followed and if not, why not?
  • How were the very high remuneration packages such as the R5,51 million to be paid to Robert Head for a mere six months work determined?
  • What are the details of the targets set for each executive member?
  • What are details of all SAA executives, not just the so-called “appointed in recent months”?

Turning around SAA will never be achieved under a cloud of secrecy and excessive spending on activities that are unrelated to the business of flying. SAA must realise that they cannot continue to receive taxpayer bailout money without accountability and openness on the conduct of their operations.