No more bonuses for failing SOEs

Jamie McKane

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No more bonuses for failing SOEs

The government has approved a policy directive which cracks down on inflated executive bonuses at state-owned enterprises (SOEs) like Eskom and the SABC, according to a report by the Sunday Times.

The directive requires that all future bonuses and incentives be based on income statements rather than balance sheets, meaning that many executives at struggling SOEs could lose their bouses entirely.
 

Kosmik

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And I've always wondered how they could pay Performance Bonuses....

“There have been SOEs in the past where the incentive system is built around the balance sheet, not the income statement, which means when they get a bailout it ists on the balance sheet and then they get big bonuses,” the head of the policy unit in the presidency, Busani Ngcaweni, told the Sunday Times.
 

Sarg3_ZN

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Throw in a salary freeze until such time as they are debt free and able to be self sustaining that is capped at the inflation rate and get rid of all the useless staff, then maybe this will work.
 

Techne

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It will take a few years for these idiots in guavament to figure out how they are now going to manipulate their KPIs to get bonuses.
 

Matt91

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They'll just find a new way line their pockets. I support the directive but it totally goes against what has become normalised and legal theft in these SOE's.
 

Rabobi

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So now all the people that are left that actually know anything will simply leave for greener pastures
 

cyb3rt

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Let SABC fail and shut down.

Why do we even need them. Spending billions for a benign function...
 

Fuzzbox

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Getting rid of the dead wood makes more sense.
But no, let the most useless SOE's gobble up tax payers money at an alarming rate.
We need competent ministers that are not driving their own agendas.

CLOSE THIS MESS DOWN ALREADY .

In case they don't know it has FAILED already.
 

ambroseg1

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Only now? The ship is already sunk in its p03s. Its too late for this. This is just a bs story to appease the gullible and naive.
 

Fulcrum29

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What does this policy directive state in exact terms?

Because, well...

The directive requires that all future bonuses and incentives be based on income statements rather than balance sheets, meaning that many executives at struggling SOEs could lose their bonuses entirely.

“There have been SOEs in the past where the incentive system is built around the balance sheet, not the income statement, which means when they get a bailout it ists on the balance sheet and then they get big bonuses,” the head of the policy unit in the presidency, Busani Ngcaweni, told the Sunday Times.

“It cannot be that you earn so much in bonuses over time and the only indicator you use to earn maximum [bonuses] has nothing to do with the performance of that institution,” Ngcaweni said.
these bonuses will occur prior to being paid as an expense. To award the bonuses on the income statement will simply mean that the SOE will have paid the bonuses whether the SOE results in net income or not. All they have to do is change the program in which bonuses are paid irrelevant whether a bailout is sitting on the balance sheet.

I don't know how things are currently working, doubt anyone knows other than the cadres and their partners in cahoots.

It seems that the policy is a bonus accrual, but this process will require an audit should it be a directive which in my opinion will cycle the same people through the process.

Just watch the big bonus announcements once this is in action because you know the bonus was paid when the SOE resulted in an income, but then made a loss when the bonuses were already paid.

Simply put, bonuses will be paid when the SOE performs positively, but the SOE will perform negatively after said bonuses are paid.
 
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