Shabangu backs PIC on CEO salaries

[miningmx.com] – SOUTH Africa’s mines minister, Susan Shabangu, threw her weight behind the Public Investment Corporation’s (PIC’s) opposition to hefty increases in the salaries of mining company CEOs, saying it perpetuated inequality and threatened the stability of the industry.

Speaking at the Africa Down Under conference held in Perth, Australia this week, Shabangu said South Africa had one of the largest differentials in pay with chief executives being paid 40 times the average salary of staff.

“Let me also welcome and support a stance taken by the PIC on voting against executive remunerations that various large gold and platinum miners proposed at their recent annual meetings,” said Shabangu.

“This behaviour perpetuates inequality and threatens the stability needed for long term development of the industry,” said Shabangu who then took a swipe at Gold Fields CEO, Nick Holland whose received R45.3m in the firm’s 2012 financial year, a 38% increase that included R24.3m in share payouts awarded in 2009.

“For instance, one company spun off most of its lucrative assets and paid its CEO in excess of R45m, while the company’s production declined by 30% during the same period. There appears to be no clearly defined performance targets,” she said.

The PIC voted against the executive pay of the country’s largest gold and platinum mining companies earlier this year, according to a report by Bloomberg News citing the state-owned pensions firm.

The PIC said the wage proposals, which it voted against at the annual general meetings of Anglo American Platinum (Amplats), Gold Fields, AngloGold Ashanti and Sibanye Gold in April and May, failed to track performance and were relative to the companies’ peer group.

The PIC’s questioning of executive pay comes against a background of wage talks in the gold and platinum sector with executives from both sectors saying they could not support double digit wage increases for workers.

Gold Fields’ Holland has come in for some beating from the South African government in the last two days after finance minister, Pravin Gordhan, picked out the company for unbundling its mature South African assets.

Gordhan said the practice of a company separating undesirable South African assets from their international counterparts was part of a “negative narrative which is not the kind of thing we want as South Africans”.