Government finally puts a cap on CEO salaries - Zimbabwe Situation

Government finally puts a cap on CEO salaries

via Government finally puts a cap on CEO salaries | SW Radio Africa  by Tichaona Sibanda on Wednesday, March 19, 2014

In the wake of complaints that a large number of chief executive officers of parastatals were getting paid astronomical salaries, government has finally acted and announced a $6,000 monthly salary cap.

The cap only affects executives of state-owned entities, following the salary-gate scandal that was triggered by the huge amount of money paid to Happison Muchechetere, the suspended CEO of the Zimbabwe Broadcasting Corporation, who took home $37,000 a month.

Finance minister Patrick Chinamasa told journalists in Harare that no chief executive of any state enterprise, parastatals or local authority should receive a total package which is above $6,000, with immediate effect.

Chinamasa emphasized that those in breach of the directive risk drastic measures against them.The minister explained that investigations instituted after the salary-gate saga revealed that 90 parastatal CEOs were setting themselves low basic pay, and then awarding themselves huge benefits.

For example, the Plumtree local board chief executive officer earns a basic salary of just over $1,000 which balloons to a staggering $17,000 with benefits.

The salary clamp down has been welcomed by many people, who believe the CEO’s were earning huge amounts for nothing as most of the entities under their control were underperforming.

Economic analyst Bekithemba Mhlanga said he also doubts any of the CEO’s will challenge the salary cap because none of the parastatals had been productive and commercially viable for ages.

‘If within the contracts there was a clause that allows government to rescind them because certain aspects have not been fulfilled then there are no legal grounds for affected CEO’s to challenge it.

‘But if some of the obligations have been fulfilled some CEO’s and the contract is silent on that, I might see Chinamasa having a few problems,’ Mhlanga said, adding it would be hard to find one parastatal that has done well in country.

‘Lets take ZBC and Muchechetere as an example. If part of his contract or package was premised on the fact that the corporation is a sound, sustainable, productive and commercially viable enterprise, then it would have been unfair to temper with the salary.

‘But as we know all these things were not happening at ZBC over the years and this gives government a good leg to stand on in cracking down on the salaries of the CEO’s,’ Mhlanga added.

Others believe the cap on the salaries has come too late when the economic situation in the country is on a downward spiral, coupled with ZANU PF’s seeming lack of knowledge on what to do about the situation.

Observers have commented that downgrading salaries will also have the effect of fuelling corruption. No CEO is going to happily accept such a decrease in salary, and will spend his whole time finding ways to corruptly top it up.

 

COMMENTS

WORDPRESS: 8
  • comment-avatar

    Now let us see how these looters will sustain their lavish life styles. It does not pay to be greed because reality will eventually catch up with you.Disaster has now arrived at home with no easy escape route.
    I hope they monitor their use of fuel allowances so that they do not give themselves huge fuel allocations which they end up selling in black market.Give them fixed fuel money and let them buy their own fuel so that they will learn simple economics in managing limited resources carefully.Those big engine cars you looted with your funny benefits require expensive service and they gallop fuel.
    Well done minister of finance ,your duties might be eased a bit now because your salaries bill will go down by 400%.The saved money can now be used to develop the country not benefit these greedy individuals.
    I am sure these illegal benefits went down to the councilors thus why some of them now run the usual dirty tuck shops in the high density suburbs at our expense.Shame on them,let them taste real life,silly cheats.

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    MhlangaM 4 years

    May the Minista also consider putting a cap on what School Heads get in terms of the so called incentives. Fees have been raised unnecessarily too high in some schools to pay ‘unreasonable’ incentives to School Heads while ordinary teachers get next to nothing on these incentives.

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    oliver chikumba 4 years

    madhodhi emene

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    Nyoni 4 years

    Well if CEOS find ways of topping their salaries they must be checked and fired if caught. Further they should have all been replaced by now for what has transpired. What a sham. No morals ethics ETC.

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    zimbo 4 years

    From what I have read – these so called ” salary caps” are not in place and are not firm. They are proposed figures – even the minister says no one SHOULD earn more. He does not say No one WILL earn more. Just my little thought for the morning!

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    Zim economy is very small to warrant such asrtonomical figures we have to be reasonable for once.

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    ike 4 years

    6ooo $ for what in zimbabwe? The salaries are still astronomical for whatever job they’re doing

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    It is not enough to just put a cap on salaries. These people committed economic crimes against the people of Zimbabwe. They must therefore face the music that goes with their premeditated actions. They found a way to legalize theft and must be brought to justice.They, no doubt, used their respective boards to do so. Consequently, they have accumulated wealth which was not deserved and must further account for the whereabouts of this wealth. It is not justice to let the looters off the hook. Zimbabweans are aching inside and still suffer from the actions of these CEO’S and many others, who claim leadership of the nation’s institutions. What can be recovered should therefore be recovered. No excuses. The people deserve justice and it must be seen to be done in Zimbabwe; we must set an example of good governance in our land. Never mind what the outsiders think.

    The Head of State indicated that jail was an option. We must wait and see if this option will be pursued vigorously by those who have promised to do so.