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Arnold Mutemi Features Editor
Revelations that ZBC chief executive, Happison Muchechetere was earning about $22,000 a month while his Premier Service Medical Aid Society counterpart was taking home $250,000 a month, excluding allowances, sparked national outrage in a country where the majority of workers are struggling to make ends meet.
The pair’s hefty packages while heading organisations that were not generating enough revenue to meet operational expenses and, in the case of PSMAS, owing service providers millions of dollars, dominated debate on discussion forums in newspapers and on social media culminating in the “salary gate” saga.
To many Zimbabweans surviving on salaries well below the poverty datum line, these salaries were a scandal which needed urgent action from the Government.
In the wake of suspicions that Muchechetere and PSMAS’ Cuthbert Dube were not the only ones drawing “obscene” salaries from publicly owned entities, the government ordered an audit of salaries of senior managers at all the 90 state enterprises and parastatals and 91 local authorities.
The audit confirmed suspicions that executives at public enterprises were drawing hefty salaries with the packages ranging from $535,499 for the highest paid to about $7 000 for the least paid chief executive.
This was despite the fact most of the parastatals and state enterprises were failing to provide service to the public.
In response to the outrage sparked by the high salaries at parastatals, government has slashed salaries of chief executives while setting a maximum limit on what they can be paid.
Under the new salary structure announced by the chairman of the Cabinet Committee on State Enterprises and Parastatals, Finance Minister Patrick Chinamasa, the highest paid CEO will get $6,000 a month including allowances while the least paid will get $4,167.
The government’s decision is likely to sit well with the public who hope money saved from the bloated salary bills would be directed to improving service delivery.
Zimbabwe Congress of Trade Unions secretary general Japhet Moyo said the labour organisation supported the decision to slash the salaries.
He described the salaries earned by chief executives were “obscene” while the salary gap between managerial and general workers was just too wide and needed to be bridged.
Moyo said with the package earned by executives, most were cushioned from the harsh economic hardships facing ordinary workers on a daily basis.
“The country is going through a rough patch and we should share the burden of these hardships,” he said.
However, Moyo queried how the government came up with the $6,000 cap. He said some chief executives did not even deserve getting the $6,000 considering the shoddy service provided by their organisations.
“The reduction was necessary. The challenge is how did they arrive at $6,000? That has not been explained. Some CEOs don’t deserve that salary. Some local authorities cannot give service like collecting rubbish bins while roads have potholes and you wonder why a CEO is getting any salary,” he said
He said the reduction in salaries was likely to benefit workers through the lowering of cost of services while workers who had gone for long periods without getting salaries were now likely to be paid on time.
“As workers we have always said if you deal with obscene salaries, most of the money which goes to perks of CEOs could reduce the price of products.
“In parastatals, the money will be released for service delivery. Eighty percent of budget was going to salaries,” he said.
Moyo does not see the drastic salary cut, which will likely result in a lifestyle change for most CEOs, igniting a brain drain to other countries.
“If you go to Botswana, South Africa, how much is a CEO earning? Our salaries were obscene. They are lying that there would be a brain drain if their salaries are cut. We want to see them going out,” he said.
Matabeleland South businessman and member of the Zimbabwe National Chamber of Commerce Nqobizitha Sibanda said while the government decision was good, he fears it might backfire since CEOs were the drivers of parastatals.
He said sitting CEOs were likely to be demoralized by the huge plunge in their salaries and this might affect their performance. He preferred a situation where all current CEOs would have been given packages to leave and new ones appointed on the new salary structure.
Personal feelings aside, Sibanda said salaries of CEOs in state enterprises needed to be reduced.
“The salaries were too much,” he said.
He said the country needed to pay salaries which will assist in the revival of the economy.
Labour consultant Ndumiso Davies Sibanda said while the country’s labour laws did not allow an arbitrary reduction in workers’ salaries, government was dealing with a crisis which forced it to take such radical action.
He said although CEOs had contracts which spelt out their benefits and salaries, the government’s hand was strengthened by the fact that some of the salaries of CEOs were awarded without following procedure and had not been approved by relevant authorities.
This would make it difficult for any CEO to appeal to the courts against the salary cut.
In any case, he said parastatal heads were appointed by the line minister who can also terminate their contracts.
“Parastatal CEOs serve at the pleasure of the minister. They have little room to manoeuvre. They either accept or find their contract terminated,” he said.
Sibanda said the government can also argue that hefty salaries paid to CEOs was against public policy where State funds were abused instead of being channelled to serve the people.
Minister Chinamasa dared parastatal heads to take legal action against the salary cut.
“We will take them head on. Let whoever wants to take us to court do so. I will be interested to know on what legal grounds they stand on, what moral grounds they stand on.”
However, Sibanda feels the $6,000 salary cap was too low and people with skills such as engineers at strategic parastatals like Zesa might leave in search of greener pastures.
“Salary at $6,000 for a CEO is on the lower end. The government has overacted by bringing down all salaries. There is need to give a sober look. Most engineers have experience sought elsewhere and chances are they might move on,” he said.
Sibanda noted that most basic salaries at most State enterprises were reasonable but the problem arose on the issue of allowances.
He said this was because most basic salaries were set after job evaluation exercises while allowances were an internal matter arrived at using different mechanisms depending on organisation.
Such was the case in Plumtree where the council chief executive Davies Dumezweni Luthe received a modest basic salary of $1,173 while his total package ballooned to $17,027 after allowances of $15,854 were factored in.
“Most basic salaries are reasonable but it is the discretionary component which is not reasonable,” Sibanda said.
He traced the problem of exorbitant allowances to the introduction of the multiple currency when government failed to align the allowances paid in the then Zimbabwean dollar to the new currencies in use.
Sibanda said while during the Zimbabwean dollar era allowances averaged 80 percent of basic salary, this should have been reduced when the US dollar was introduced.
“The allowances should have been reconfigured to five to 10 percent of basic salary,” he said, giving an example of statutory interest charged in the judiciary which was reduced from 25 percent in the Zimbabwe dollar era to five percent after the introduction of the multiple currencies.
Online Reporter