NAMPOWER managing director Simson Kahenge Haulofu turned down a N$17 million offer to run the parastatal for five years because he wants medical aid for life and a mega bonus when his term ends.
NamPower appointed Haulofu earlier this year for five years from 1 July to 2021 and Cabinet endorsed it although he is yet to sign the contract.
Although Haulofu (54) has been negotiating with the board for the past few months, documents seen by The Namibian show he has been pushing for a better package that is likely to take him into retirement.
In her letter to energy minister Obeth Kandjoze that was also copied to public enterprises minister Leon Jooste, NamPower’s board chairperson Maria Nakale said they offered Haulofu two contracts in July.
According to Nakale’s letter dated 3 November 2016, one contract had the option of a company vehicle, while the other did not.
“Haulofu chose the option without a company vehicle,” Nakale said, adding that although Haulofu picked the contract, he did not sign because it does not include some benefits.
The contract chosen by Haulofu, the documents show, is worth around N$3,4 million per year (N$17 million in five years).
The annual N$3,4 million includes a N$1,7 million guaranteed salary – N$100 000 per month, and a housing allowance of N$520 000 per year (N$43 000 per month).
The rest of the package includes N$800 000 per year for benefits such as N$436 000 for his pension, N$130 000 for medical aid and a 13th cheque of N$144 000.
The contract also allows for an N$860 000 sign-on-bonus which is paid every year, but which will increase per year, depending on the salary increase. There is furthermore a N$37 000 per year entertainment allowance.
Despite that offer, which is one of the best in the country, Haulofu wants more.
“Haulofu indicated to the board that he was accepting the offer, however, expressed dissatisfaction on the board’s refusal to grant him the post-retirement medical aid,” Nakale said in her letter to the minister.
Minutes of meetings show that the board had several reservations on why Haulofu should not get what he wants.
The board said the post-retirement medical aid cover which Haulofu wants was initially in the draft contract, but the board decided to scrap it.
In the past, senior executives at NamPower were entitled to a ‘medical aid for life’, but the policy was dropped in 2004 by the board after realising that retired employees’ medical benefits were draining the company’s funds.
For instance, documents state that ex-NamPower boss Leake Hangala has a medical aid cover for life. Hangala, however, told The Namibian that the cover was stopped when he left.
Haulofu is still a beneficiary of the medical aid for life scheme because he was at NamPower before 2004, but the board said he will lose this benefit if he takes up the managing director’s job because he will be regarded as a new staff member.
Another bone of contention between the managing director and the board is the issue of a golden handshake.
According to documents, Haulofu wanted N$3,4 million gratuity when his term ends. The board recommended that this type of golden handshake should be removed from the contract, and he should rather be paid around N$300 000 (equivalent to three months of his salary).
NamPower’s chief legal adviser Bjorn Joerges advised the board that Haulofu enjoyed several benefits in his previous lower position before he took up the new job.
“His legal (legitimate) expectation would thus be that these conditions should (at least if not improved) remain intact in his new or amended contract,” Joerges said.
In a letter written to chief of corporate affairs Isaac Tjombonde, legal adviser Joerges made several recommendations, including a proposal that Haulofu should get his medical aid for life, the golden handshake, and the inclusion of a clause that will allow the managing director the golden handshake if his contract is terminated before it expires.
Haulofu wrote a letter on 24 October this year, in which he complained that taking up the managing director’s position in the organisation should not be detrimental to his existing benefits.
The managing director said despite the internal legal opinion, “the board seems intent on pursuing the option of treating me as a new employee, incorporating new conditions of employment, with resultant reduction/benefits”.
He advised the board to insert the recommendations by the legal adviser, who agreed to give him what he wanted. If not, Haulofu said the board should ask for an independent legal opinion.
Another option suggested by the managing director is that the board should consult the line minister for input. If that fails, the matter can be referred to the labour commissioner.
Emailed questions sent to Haulofu and Nakale were not answered. Haulofu told The Southern Times this week that he expects the stand-off to be resolved.
“I do not think it is a big deal. It is just maybe some people who want to portray it as otherwise. I think we are on the right track,” he said.
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