Hon Deputy Speaker, hon Ministers, hon members, the remuneration of company directors and executives is an issue that has attracted considerable interest and attention from members of the public in recent years. There has over the years been growing concern about the excessive remuneration of executives in the private sector and, more recently, in state-owned enterprises as well. Executive remuneration packages in South Africa are not always connected with the relevant performance measures.
The 2010 Statistics South Africa's household survey found that the top 10% of earners in South Africa took home salaries 101 times higher than the bottom 10% of earners. Income inequalities in the mining sector were discussed in detail over the past few months and were described as one of the major contributing factors to the labour unrest in that industry. These salary differences widen the income gap between executive managers and ordinary employees and thus increase inequality in a country that is already grappling with the rebellion of the poor.
In addition, there is the widespread culture of giving golden handshakes to senior managers despite poor entity performance. This culture is firmly entrenched in the public sector, and the SOEs in particular. For instance, the former South African Airways CEO, Khaya Ngqula, received a golden handshake of R8 million after he was fired for his involvement in the rigging of a tender in 2009. Dali Mpofu, former CEO of the SABC, was given a golden handshake of R11 million for suspending then head of news, Snuki Zikalala, and running the SABC into the ground. A more recent example involves the suspended Director-General of the Department of Agriculture, Langa Zita. According to media reports, Langa Zita, who was suspended for administrative reasons, will receive a golden handshake of R2,5 million.
The common denominator of all these examples and many others not cited here is the incompetence of managers deployed to run these entities. It is common knowledge that the majority of the people who have been or are tasked with running public sector institutions or SOEs are incompetent.
It is for this reason that I find it difficult to follow the logic that high private sector salaries have an effect on the public sector or SOEs. Granted, exorbitant private sector salaries are a problem that requires urgent attention. However, they would become a major factor only insofar as the competition for the highly skilled and talented among us is concerned. Given the extent of incompetence in the public sector, as I have just mentioned, I doubt it if the public sector faces any serious competition from the private sector. [Time expired.]