Friday, 21 February 2014 18:35

PPC CEO takes R1m pay cut

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PPC CEO Ketso Gordhan takes a R1m pay cut and his top 60 managers' remuneration is frozen in order to hike the wages of the cement maker's 1,200 lowest earners.

Ketso Gordhan

PPC CEO Ketso Gordhan took a R1m pay cut last year and his top 60 managers' remuneration was frozen in order to hike the wages of the cement maker's 1‚200 lowest earners.

Mr Gordhan said the gesture had been "very well received" by employees. It should set an example for other companies.

Both the private and public sectors have come under pressure to narrow pay differentials between management and entry-level positions.

President Jacob Zuma last year overlooked a recommendation that public office bearers earning more than R1m annually not receive pay hikes for the year.

All public office bearers‚ barring himself‚ got a salary increase of 5% across the board for 2013-14‚ backdated to April 1.

In PPC's latest salary adjustment‚ effective from October last year‚ "the top 60 people took a salary freeze‚ I took a salary freeze and a cut‚ and we basically were able to increase the salaries of about 1‚200 people at the bottom by about R10‚000 (each) a year".

Mr Gordhan said combined with the usual annual pay increase‚ "most workers at that end of the spectrum got about a 15%‚ 16%‚ 17% increase".

This was the right thing to do to reduce the wage gap.

This followed discussions with employees‚ after which "we responded quite positively to what we thought was a legitimate complaint"‚ Mr Gordhan said.

Employees were not making excessive demands‚ as was the case at some other companies‚ "they were just saying it's tough to make ends meet".

A PwC report on trends in executive directors' pay‚ released last year‚ showed that the total guaranteed package (excluding bonuses and incentives) of a CEO of a JSE-listed company was 53.53 times the average income of the lowest band of employees.

Mr Gordhan said semi-skilled workers had welcomed the initiative not just for the money‚ "but mainly because people have felt they were listened to — it has been amazing".

South Africa had to find ways to reduce income inequality.

Such initiatives would also boost the domestic economy as lower-income earners spent their disposable incomes on locally produced goods and services‚ Mr Gordhan said.

Higher-income earners spent parts of their salaries on foreign-made goods and holidays.

According to PPC's 2013 annual report‚ Mr Gordhan voluntarily agreed to a R1m reduction in his total guaranteed package‚ effective from October last year.

Last modified on Thursday, 14 September 2017 16:23

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