http://www.busrep.co.za/index.php?fSectionId=561&fArticleId=2555854
June 13, 2005
By Riedwaan Baboo
Cape Town - The average fee earned by executive directors, excluding gains from share options, increased from an average of R2.6 million in 2003 to R3.7 million last year. This amounts to a 38 percent increase.
In 2003 it took a worker earning the average minimum wage 111 years to earn what the average director earns in one year. With the huge increase in executive directors' fees last year, it takes that same worker 150 years to earn the average annual fee of a director.
This emerges in the latest directors' fees survey conducted by the Labour Research Service and it is a trend that should be of concern to organised labour, corporations and the government as well as civil society.
For organised labour, this earnings differential exposes the huge income inequality within the workplace. This information is important for workers as they continue to challenge the growing wage gap within their workplaces.
According to a UN Development Programme report released in 2003, households in South Africa depend on wage income as their main source of livelihood. Given this, workers' demands for percentage increases in income similar to directors' are justified.
Workers' demand for closing the wage gap must be framed in a manner in which they are able to attain a specific target within a specific period.
Directors' excessive remuneration should matter to corporations as this elitism is not sustainable in the long run. Despite the importance of wage income for households, companies insist on keeping wage levels depressed. This clearly indicates that not all the interests of its stakeholders are regarded as equally important.
The excessive remuneration of directors should indicate to shareholders that the current notion of corporate governance and corporate social responsibility as vehicles and mechanisms for corporate transformation is defective.
It has been unable to change corporations into "responsible citizens". There needs to be a serious reappraisal of this framework.
Telkom chief executive Sizwe Nxasana tripled his remuneration last year while thousands of workers were retrenched. Why must workers continue to bear the burden of a drive to maintain profit margins?
Surely, given the context of high unemployment and widespread poverty, retaining workers and job creation must be a performance criterion for directors.
It should matter to the government because the excessive remuneration of directors undermines and delays the democratic transformation of our society. Corporations need to be regulated so that they act in the interests of all stakeholders.
It should be important to the broader civil society because it reflects that the current economic framework is unable to reign in "crass capitalism", which entrenches and exacerbates inequality.
The adoption of a developmental framework that ensures a fair and equitable distribution of income is crucial.
June 13, 2005
By Riedwaan Baboo
Cape Town - The average fee earned by executive directors, excluding gains from share options, increased from an average of R2.6 million in 2003 to R3.7 million last year. This amounts to a 38 percent increase.
In 2003 it took a worker earning the average minimum wage 111 years to earn what the average director earns in one year. With the huge increase in executive directors' fees last year, it takes that same worker 150 years to earn the average annual fee of a director.
This emerges in the latest directors' fees survey conducted by the Labour Research Service and it is a trend that should be of concern to organised labour, corporations and the government as well as civil society.
For organised labour, this earnings differential exposes the huge income inequality within the workplace. This information is important for workers as they continue to challenge the growing wage gap within their workplaces.
According to a UN Development Programme report released in 2003, households in South Africa depend on wage income as their main source of livelihood. Given this, workers' demands for percentage increases in income similar to directors' are justified.
Workers' demand for closing the wage gap must be framed in a manner in which they are able to attain a specific target within a specific period.
Directors' excessive remuneration should matter to corporations as this elitism is not sustainable in the long run. Despite the importance of wage income for households, companies insist on keeping wage levels depressed. This clearly indicates that not all the interests of its stakeholders are regarded as equally important.
The excessive remuneration of directors should indicate to shareholders that the current notion of corporate governance and corporate social responsibility as vehicles and mechanisms for corporate transformation is defective.
It has been unable to change corporations into "responsible citizens". There needs to be a serious reappraisal of this framework.
Telkom chief executive Sizwe Nxasana tripled his remuneration last year while thousands of workers were retrenched. Why must workers continue to bear the burden of a drive to maintain profit margins?
Surely, given the context of high unemployment and widespread poverty, retaining workers and job creation must be a performance criterion for directors.
It should matter to the government because the excessive remuneration of directors undermines and delays the democratic transformation of our society. Corporations need to be regulated so that they act in the interests of all stakeholders.
It should be important to the broader civil society because it reflects that the current economic framework is unable to reign in "crass capitalism", which entrenches and exacerbates inequality.
The adoption of a developmental framework that ensures a fair and equitable distribution of income is crucial.