The South African Federation of Trade Unions is outraged at the report by accountants PwC that the 342 Chief Executive Officers of the country’s ten biggest JSE-listed companies earned average total remuneration packages of R24.9m a year in 2017. For Chief Finance Officers the figure is R15.1m and for executive directors R8.7m.
For the CEOs his was an increase of 1.3% on 2016, for CFOs it was up almost 10%, while for the 10 executive directors it was up 12.8%, way above the rate of inflation.
The report adds says that these figures are averages and that the levels of remuneration varied considerably among the 342, which means that many of them will have received far more than these amounts.
The report also found that only 2.2% of the CEOs at JSE-listed companies were women and the percentage of women in leadership roles at SA companies has increased only slightly – from 26% in 2004 to 28% in 2017.
South Africa is already the most unequal country in the world and this report shows that it is growing less equal every day!
Oxfam have revealed that the richest 1% of the population owns 42% of the country’s wealth; and the wealth of South Africa’s top 10% grew 64% in first 17 years after 1994, whereas the wealth of the poorest 10% did not grow at all.
In 2015, 55,5% of the population – 30.4 million people – lived below the upper-bound poverty line of R992 a month, an increase of 2.3% from 53,2% in 2011. 40% lived below the lower-bound poverty line of R544 and 25.2% had to live below the food poverty line of R441, just enough for mere existence.
What is most infuriating to workers is that the people receiving these colossal amounts are the same ones who are argue that companies cannot afford to pay their workers wage increases to compensate for the rise in the cost of living.
They are the same people who say that the country cannot afford to spend the current level of money on education, healthcare and other essential services and demand that the government cut its budget for those services even more.
They are the same people who want employers to be allowed to pay less than the poverty minimum wages of R20, R18, R15 and R11 an hour, because they do not have enough money.
Yet they see nothing wrong with paying themselves amounts that are equivalent to to almost R12 000 an hour!
The poverty of the many explains the opulence of the few, as wealth is created by the toil of the workers, while the rich steal that wealth and use every means possible to force workers to accept poverty wages and further widen inequality.
The share of wages in the GDP has plummeted from 57% in 1991 to below 50% today, while the wealth of multibillionaires is growing faster than the economy. The casualisation of labour and the undermining of collective bargaining have speeded up the process by condemning more workers to precarious and low-paid employment.
This fall in workers’ real wages is confirmed in BankservAfrica’s Take-home Pay Index that take-home pay levels declined dramatically in May 2018: “The average gross salary in May 2018 was R14 290 in current terms. Net take-home pay was R10 010. But when the gross salary is changed to constant 2016 money – to make comparison easier – it decreased to R13 621, some R290 less than in April 2018.
“The current typical wage increased by 2.8%, but after taking inflation into account, declined by 1.5%. The decline leaves take-home pay in constant terms at the same level as in December 2013″.
As even right-wing economist Mike Schüssler points out, in a comment about this report, lower wages are not just a burden on the low-paid workers and their families themselves but have a negative affect on the whole economy.
“The shrinking economy and low profit margins,” he says, “made large salary increases unlikely with employees feeling the impact of the burden of the current difficult times… As such May is likely to reflect badly not only for retailers but also for other sectors that rely on consumer spending.”
This is the same big pro-capitalist commentator who said in 2014 that the cause of high unemployment is “militant labour organisations making demands for ever increasing wages”, implying that higher wages increase unemployment and inequality.
Yet now he admits that low wages reduce consumer spending and demand for goods and services and thus confirms SAFTU’s argument that falling incomes actually increase unemployment and slow down economic growth even further.
SAFTU demands a living national minimum wage on which workers and their families can live in comfort and enjoy the benefits which middle-class South Africans take for granted – good education for their children, proper healthcare, holidays and pensions.
But it would also turn millions more of the poorest into consumers, which will increase demand and lead to more jobs and help to reverse the economic decline which is piling more misery on to the shoulder workers and the poor majority.
These billionaires try to justify inequality and their gigantic salaries and bonuses by saying that these are successful leaders, who generate big profits. Yet there is no evidence that their performances deserve any such huge rewards.
Even PwC diplomatically ask “whether companies should not claw back incentives paid to or vested in culpable executives in the event of a corporate failure. In light of the current climate and recent corporate failures, companies need to look at whether they have the appropriate measures in place to hold executives to account if the need arises, and if necessary recover their variable pay.”
This is a polite way of suggesting that people like billionaire Christo Wiese, Chairperson of Shoprite and Steinhoff, a company which is estimated to have lost the country R188 billion, more than the estimated losses from all the Gupta-related scandals, should be asked to refund some of the cash which made him one of the country’s richest.
Steinhoff’s crash has threatened the livelihoods of millions of workers whose pension and provident funds have been invested in this company. It threatens the jobs of over 130 000 workers in 32 countries around the world, mostly in the retail sector.
Yet the Hawks have done nothing to investigate possible criminal acts in the company or by its executives and board members. In hardly any cases has action has been taken against other companies and individuals accused of financial crimes.
As well as the grotesque salaries and bonuses paid to executives, billions leave our country yearly through illicit financial outflows. According to data released by Global Financial Integrity, between 2002 and 2011, South Africa lost a cumulative 1,007 billion rands to illicit outflows, i.e. more than a trillion rands. In 2007
Yet all these financial abuses remain unpunished while the wealthy bosses who preside over the companies involved get richer and richer.
SAFTU demands that not only must action be taken to prosecute individual wrong-doers, but there must be a fundamental transformation of the underlying capitalist system which is at the root of the criminality.
There are growing signs that the workers and the poor are demanding such a change. They are angry and frustrated at all the the attacks on jobs and living standards. There has been a wave of strikes and angry protests across the workforce – bus and truck drivers, municipal workers, farm workers, leather workers, hose grooms, Eskom employees, staff in hospitals and universities and many more – and in poor communities all over the country.
These strikes and protests are both about workers’ and communities’ specific and absolutely legitimate grievances but at the same time part of a groundswell of wider calls for fundamental changes to transfer wealth and power to the people from the elite class of white monopoly capitalist billionaires.
That is why the Working-Class Summit on 21-22 July is so important. It must be a way to draw together all these different struggles into a united mass movement for change and chart a way forward. To begin with we should look at immediate ways to claw back more of the country’s wealth created by the workers from these overpaid despots, for instance, through the following key proposals:
1 The introduction of a wealth tax
2 The introduction of a solidarity tax
3 The review of the corporate taxes that were around 45% during the apartheid era but driven down to around 28% during the era of democracy.
4 The reviewal of the personal income tax to ensure that those who can pay more make more contributions to the fiscus
5 Capping the salaries of those earning grotesque amounts not through declaration of intent but practically
6 The full implementation of the Freedom Charter’s clauses 3 and 4 on land and sharing of the economy
After this PwC report the bosses cannot are dare to sa that they cannot afford to pay more!
The Summit’s goal must be unity of all the oppressed majority of South Africans – civil society the youth, employed and unemployed workers, those in the informal sector and in more secure work, the students and the landless, the homeless and those fighting against the water crisis and the scourge of violence against women and children, into a struggle for a truly free, democratic and equal society.