New breed of high-earning SOE bosses

A NEW tier for the highest paid parastatal bosses could become a reality once a report on a study compiled by private consultants is adopted by the State Owned Enterprise Governance Council.

The council commissioned a consultancy firm to reclassify parastatal bosses’ salaries.

One of the suggestions made by the consultants is to add another tier to the current three and that this tier should be based on factors such as the number of staff members, “consequence of error” and turnover.

Frans Tsheehama, the head of the enterprise governance council who confirmed the reclassification process last year, declined to comment on the recommendations.

“We should wait for the outcome of the study. The council will deliberate on the issue and the public will be informed about any changes,” he said.

Sources, however, said the council is expected to implement the advice to add another tier, which will change the income of some parastatal bosses.

In 2010, the council implemented pay guidelines with maximum caps, although several chief executive officers continue to earn above those caps.

The guidelines, approved by Cabinet, divide parastatals into three categories: Tier 1, Tier 2 and Tier 3.

According to the guidelines, a chief executive officer in Tier 1 should only earn between N$401 199 and N$803 413 annually, while those in Tier 2 should earn between N$451 739 and N$987 197 annually.

If a parastatal falls under Tier 3, its chief executive should earn a minimum of N$709 722 and a maximum of N$1 532 828 but some sources at the council have complained that the majority of 87 parastatal bosses earn way above the prescribed threshold.

Salaries and perks of parastatal executives have come under the spotlight over the years as many are considered overpaid by State-owned businesses that often incur losses and constantly rely on taxpayer bailouts.

The current salary categories have not been well accepted by some SOE bosses.

One of them is the managing director of National Petroleum Corporation of Namibia (Namcor), Obeth Kandjoze, who said last year there was a need to revise rules on the salaries of parastatal bosses because they target top bosses while their subordinates might be earning more.

Kandjoze earns N$1,5 million per year, an amount which contravenes remuneration guidelines of state entities as Namcor falls under Tier 2 whose executives must earn between N$451 739 and N$987 197 annually.

The MD believes the regulations only target top executives while turning a blind eye on juniors, who are also being overpaid. He further said, at some point, this makes juniors who earn more than their bosses to undermine authority.

According to him, the salary caps have affected his plans to bring in technical experts because the latter rejected the offers made, deeming them too low.

Kandjoze, who earned N$1,2 million as manager of exploration and production, admitted that the N$1,5 million he receives per annum is above regulations but said that he could not have settled for anything less as MD.

Kandjoze is not the only parastatal head whose salary has raised questions.

Polytechnic of Namibia rector Tjama Tjivikua, whose institution falls under the same tier as Namcor, was on the verge of taking the institution he has led for more than 20 years to court after the Polytechnic of Namibia Council threatened not to renew his contract because he was being paid above set regulations.

Tjivikua earns close to N$2 million per year.

Tier 3, which is the highest paid category, includes parastatals such as Namibia Water Corporation, August 26 Holdings, Namibia Financial Institutions Supervisory Authority, Air Namibia, Namibia Port Authority, NamPost, Namibia Power Corporation, Roads Contractor Company, Telecom Namibia and TransNamib.

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