Days after Enoch Godongwana wrote a scathing letter to the mayor of Johannesburg, Dada Morero, about fiscal prudence, the DA wants the Minister of Finance to investigate why the CEOs of the metro’s companies earn so much money.
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The Citizen has seen a letter written by DA caucus leader Belinda Kayser-Echeozonjoku requesting an investigation into the steadily rising salaries of these senior officials.
“I write to formally request urgent intervention, oversight and investigation into escalating executive salary structures, excessive board remuneration, governance failures, possible financial misconduct, and financial sustainability risks within municipal entities of the City of Johannesburg Metropolitan Municipality,” wrote Kayser-Echeozonjoku.
According to the letter, the City Power CEO reportedly earns approximately R4.98 million annually, reflecting an increase of approximately 61% since 2022.
- Johannesburg Water’s CEO reportedly earns approximately R3.6 million annually, despite persistent water outages and infrastructure collapse.
- Johannesburg Property Company proposed approximately R5.5 million annually for its CEO, which is more than the City Manager’s salary.
- Johannesburg Development Agency’s CEO earns approximately R3.7 million annually.
- The Johannesburg Roads Agency proposed an annual salary of approximately R4.07 million for its CEO.
- Pikitup’s Managing Director’s remuneration is approximately R4.49 million annually, despite operational inefficiencies and recent strikes.
- Johannesburg Social Housing Company (JOSHCO)’s CEO earns R3.6 million annually.
“Reports further indicate that executive remuneration across City entities has reportedly increased by approximately 26% since 2022, substantially exceeding inflation and public sector salary guidelines.
“Ten of the thirteen municipal entities reportedly remunerate executives above the upper limits prescribed for senior managers in terms of national government guidelines,” she claimed.
How much does the City spend on salaries?
According to Kayser-Echeozonjoku, the city currently spends approximately R21 billion annually on salaries, while residents continue to experience electricity outages, water shortages, potholes, refuse collection failures, and deteriorating infrastructure.
Investigation into board fees
Her letter also expresses concerns about the remuneration of board members in the different City entities.
“It is further concerning that certain boards reportedly convene numerous board and committee meetings annually, resulting in significant board fees and governance costs to residents while service delivery deteriorates.
“Serious questions must therefore be asked regarding the necessity and frequency of board meetings, the value derived from board and subcommittee structures, cumulative board remuneration costs, attendance records, and productivity outcomes,” wrote Kayser-Echeozonjoku.
She believes that the continued expansion of executive remuneration and governance costs amid declining service delivery raises serious concerns regarding compliance with the Municipal Finance Management Act (“MFMA”).
“In light of the above, I respectfully request the following: 1. That National Treasury urgently assess the legality, affordability and compliance of executive remuneration and board remuneration structures across all City of Johannesburg municipal entities,” wrote Kayser-Echeozonjoku.
Godongwana’s meeting with Joburg’s mayor
Godongwana said on Friday that he had a productive meeting with the mayor of Johannesburg regarding the municipality’s financial shortcomings.
The Citizen understands that the meeting took place in Alberton, where both parties brought their teams of experts and officials.
“The mayor has agreed that he and his officials must go back and consider some serious remedial actions that will address the issues that we have raised.
“They will soon submit a formal report to the Treasury in response to the letter that I sent,” said Godongwana.
One of the issues that Godongwana had complained to Morero about is an “illegal” and irrational R10.3 billion wage deal that the City of Johannesburg had recently entered into with the South African Municipal Workers Union (Samwu).
In response, Samwu accused Godongwana of encroaching on labour matters. The union’s provincial secretary, Mpho Tladinyane, further accused Godongwana of colluding with the DA in an election year.
“Treasury has increasingly sought to interfere in collective bargaining processes and municipal labour relations, despite not being a party to these negotiations. We have seen these forms of interference before, and Samwu will not allow them to continue unchecked.
“Samwu rejects this emerging alliance between the DA and National Treasury, which seeks to undermine collective bargaining and reverse gains won by workers through years of struggle,” said Tladinyane.
Godongwana described the city as effectively bankrupt and unable to afford this wage deal under the current circumstances. He had indicated that the city has less than R4 billion in cash on hand, with debt exceeding R20 billion.
Morero has insisted that the City is not in a financial crisis.