The outgoing Telkom Group CEO Sipho Maseko earned R34,199,625 during his nine months with the company from April 1 to December 31, 2021.
His remuneration included a basic salary package, short-term and long-term incentives, and a R10 million retention bonus.
Shareholders expressed concern about the large deductions received by Maseko, which amounted to 20 million rand in cash over two years.
“The Board of Directors has deemed it strategically important to retain Mr. Maseko’s services for at least two years,” Telkom’s FY 2021/22 Summary Report says.
“The Board remains of the opinion that the right decision was made.”
Telkom’s board claimed that there were several main reasons why they decided the company should keep Maseko:
- Several of Telkom’s biggest competitors were looking for new executives.
- Some strategic issues, including the restructuring of Telkom and the spectrum auction, were still underway.
Under the terms of the board’s agreement with Maseko, he was to remain with the company until March 31, 2022.
If he retired during the withholding period, he would have to pay the gross amount, including the tax portion, before the date of withdrawal.
Ironically, in December the board decided that Maseko must leave his post earlyand Serame Taukobong took over as Group CEO on January 1, 2022.
However, Telkom’s board said that Maseko remained as a consultant until June 30, 2022 to help resolve “certain strategic issues”.
In addition to holding it, Telkom also entered into a trade restriction agreement with Maseko for a period of 12 months from its last day on June 30, 2022.
The taxable amount of R32 million is due on 1 July 2022.
“There were no restrictions in Mr. Maseko’s original employment contract in April 2013,” the report says.
“In view of the lack of a trade restriction entered into when Mr. Maseko joined Telkom in 2013, and given the significant influence he had as Telkom’s GCEO for eight years, the Board agreed that it would be in the best interests of businesses to participate with Mr. Mr. Maseko and agree on the terms of a restrictive agreement.”
Telkom Executive Compensation information reported in the annual report is presented in the table below.
| Telkom Executive Compensation | |||
|---|---|---|---|
| Element | S.N.Maseko | With Taukobong | DJ Reinecke |
| Base pay | R9,400,000 | R4,250,000 | R5,824,000 |
| Short term incentives | 5 265 974 | R3,543,762 | R2,166,926 |
| Long Term Incentives | R9,521,358 | – | R1,040,785 |
| Other benefits | R12,293 | R6,146 | R19,678 |
| Retention Bonus | R10,000,000 | – | – |
| General | R34,199,625 | R7,799,908 | R9 051 389 |
