Mixed reactions towards salary cuts for CEOs

The slashing of salaries for CEOs leading parastatals and local authorities is expected to have a positive economic impact in the long term. This, however, has drawn mixed reactions from the business community.
Business has expressed mixed reactions towards salary cuts for CEOs of state enterprises and parastatals with some optimistic of a trickle down effect in the country's economic performance, while others have warned of a massive brain drain.
In reviewing the salaries, the cabinet committee on state enterprises and parastatals development said the high salaries where not in line with current economic performance and low productivity in parastatals.
It noted employment costs as a key driver of cost increases with utility charges being raised in some cases to finance the high salaries.
Business Ethics Centre Director Bradwell Mhonderwa said the government took a positive action that will save funds that can be channelled elsewhere.
"If you look at the level of rot in the economy, not just parastatals, definitely these huge salaries were a big drain on service delivery," said Mr Mhonderwa.
Industrialist Larry Mavhima said there was need for a balancing act in slashing salaries in order to avoid brain drain of skilled professionals who will also be affected.
"Remember these salaries are not only applicable to the CEO, but all the way down to the line managers and if the line managers feel they are not being properly remunerated, they will find greener pastures," Mr Mavhima said.
The government slashed salaries and perks for parastatals and local authority bosses to US$6 000 per month for more than 70 organisations and at least US$1,168 million will be saved monthly.