Public Enterprises Minister Malusi Gigaba. Picture: TREVOR SAMSON
Public Enterprises Minister Malusi Gigaba. Picture: TREVOR SAMSON

THE perks attached to the pay packages of executives of state-owned companies will definitely be capped, as they often resulted in "extravagant" remuneration, Minister of Public Enterprises Malusi Gigaba said on Wednesday.

While he could not comment on what would happen to salaries arising from the review of remuneration packages of executives of state-owned companies, Mr Gigaba said he would "put his head on the block" that benefits would be capped.

Addressing the Cape Town Press Club, the minister said the current remuneration packages of top executives were "unsustainable" and could not be allowed to escalate without any regard to inequality and the wage gap.

If this escalation was allowed, it would result in social instability, as people wanted to know that the political and economic system was fair and equitable, he said.

What was objectionable, the minister said, was that the executives received their perks regardless of the performance of their companies.

Putting caps on perks did not mean that state-owned companies should be uncompetitive in terms of their recruitment policies, he said.

Mr Gigaba believed there was a sufficient number of skilled people who were willing to run parastatals without demanding "extravagant" pay.

The Department of Public Enterprises is in the final stages of developing new remuneration standards for executives and nonexecutive directors of state-owned companies. The question of pay for the senior executives of state-owned enterprises such as Transnet, Eskom, and South African Airways has been widely criticised for some time but government has taken a long time to resolve it.

A moratorium has been placed on increases on executive pay at state-owned enterprises until the new framework has been finalised.

Excessive golden handshakes paid to departing executives have also caused an outcry.