Govt to cut salaries of senior parastatal and council executives

The Cabinet Committee on State Enterprises and Local Authorities has resolved that the outrageous salaries of senior parastatal and council executives be adjusted to align them with productivity.

The new salary framework will be presented this Tuesday to Cabinet for adoption after which it will be made public through Parliament. It is understood the new structure focuses on service delivery targets, remuneration ability and rewarding exceptional corporate performance, among other key salary determinants.

Finance and Economic Development Minister Patrick Chinamasa told The Sunday Mail on Friday that the Cabinet committee met last Thursday to deliberate on the proposed new salary structure.

He said a report containing findings and recommendations will be finalised tomorrow for presentation to Cabinet and Parliament. Chinamasa, who chairs the committee, would not be drawn into divulging the figures.

"As you know, on our first meeting, we dealt with the issues of corporate governance and made recommendation which were adopted by Cabinet and they are to be implemented.

"The deliberations yesterday (Thursday) touched on the remuneration framework. We will make the necessary recommendations to Cabinet on Tuesday. It's up to Cabinet to implement and it needs to adopt first.
"We are hoping that those (salary) adjustments will be effected.

"The (salary) framework will tighten Government oversight structures on remuneration, giving consideration to ability to pay, taking account of service delivery targets, as well as rewarding corporate performance that is above targets."

Last month, all the country's 78 State-linked entities submitted their salary schedules to the Office of the President and Cabinet for scrutiny amid reports that top executives were raking in outrageously high pay that did not tally with service delivery.

A fortnight ago, Cabinet approved a raft of measures to bring sanity to the organisations by ensuring compliance with the Corporate Governance Framework for State Enterprises and Parastatals as well as the National Code of Corporate Governance.

Announcing the measures, Minister Chinamasa said Government was concerned by employment costs that were higher than what these entities generated.

Some of them resorted to bank overdrafts and loans to sustain the salaries, resulting in Government bailing them out through debt assumption and budget appropriations.

"Sadly, the unsustainable employment costs are largely on account of the huge salaries, allowances, and perks being paid to top management contrary to the Corporate Governance Framework for State Enterprises and Parastatals over principles of affordability and sustainability," said the minister.