CABINET has approved the State Enterprises and Parastatals (SEPs) remuneration framework which is expected to end the mismatch between high salaries and poor performances in parastatals, a senior Government official has said.
Government says some parastatal boards were meeting over 40 times a year and claiming allowances, despite the poor and murky performance of the entities.
Secretary for the Corporate Governance Unit in the Office of the President and Cabinet (OPC), Ambassador Stuart Comberbach last week said the new remuneration framework would be split into three to cater for board members, top executives and local authorities.
“There is a remuneration framework which is under development now. The Ministry of Finance, ourselves (Corporate Governance Unit) and Sera (the State Enterprises Restructuring Agency), are working on it,” said Ambassador Comberbach during a public and private dialogue on the Bill.
“It is in three parts; one is on boards of State Enterprises, (the other) one is on chief executive officers and senior managers and on local authorities.
“It has gone to Cabinet and Cabinet has approved the remuneration framework for boards and for local authorities, that is done. “Implementation of that framework is linked to the coming into force of this Bill (the Public Entities Corporate Governance Bill),”
Ambassador Comberbach said discussions over the remuneration framework for chief executive officers and senior managers are ongoing. “The idea is to introduce some consistency and transparency in how these remuneration packages are worked out or implemented,” he said.
SEPs remuneration structures have become a cause for concern in the wake of poor performances. Almost 90 of the 107 SEPs are perennially loss making, with six being technically insolvent while others are refusing to publish their audit results.
Chief Secretary in the Office of the President and Cabinet Dr Misheck Sibanda said it has become paramount to address the SEPs remuneration given the poor performance of parastatals.
“There is little, if any, consistency in remuneration packages accorded to management across the various categories of State entities. “Virtually zero consideration is given to the operational performance of the entities in determining whether the entities indeed can sustainably afford such packages,” said Dr Sibanda.
In 2014, there was a Cabinet directive on SEPs remuneration following the revelations of obnoxious salaries at some of the entities owned by Government.
However, Dr Sibanda said the directive had largely been ignored with subsequent audits unearthing “some rather innovative, but often questionable manoeuvring to boost management packages by way of ‘payroll’ disbursements”.
“This was despite the fact that in many instances, the entities concerned were either ‘technically insolvent’ or ‘illiquid’.”
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