Civil society researchers are promoting the idea of linking the earnings of those in control of state entities to the results on their financial statements.
Organisation Undoing Tax Abuse (Outa) released a report this week that highlighted a mismatch between the cost of bailing out state-owned enterprises (SOEs) and the salaries of those entrusted with running them.
By comparing the governance structures of three countries at scaled degrees of economic development, Outa made a case for replicating certain legislative practices.
Not for the ‘sake of optics’
Examining just three SOEs – Eskom, Transnet and South African Airways (SAA) – Outa found that R520 billion had been spent on taxpayer-funded bailouts since 2008.
While these SOEs were haemorrhaging funds, board members were pocketing up to R2 million a year – excluding bonuses, travel allowances and high-end perks.
Outa insists that pay structures “remain inconsistently transparent and vulnerable to political influence” and suggested linking SOE board salaries to observable standards.
“This is not about cutting pay for the sake of optics. It is about linking remuneration to clear, measurable outcomes. If performance declines, pay must reflect that reality,” said Outa Parliamentary Project Manager Robyn Pasensie.
Outa noted the Public Finance Management and Companies Acts, but stressed these did not “define enforceable performance-linked remuneration structures”.
Portfolio Committees are primary oversight bodies, but Outa argued these were not rigorous enough in questioning salary packages.
However, Outa did acknowledge the First and Second Companies Amendment Acts from 2023 as moves that increased “constitutional compliance” and engaged civil society groups.
Replicating better ideas
Outa measured the three SOEs against the public sectors in New Zealand, India and Canada.
The metrics it used were systems that govern independence in remuneration setting, performance linkage, political interference, as well as transparency and accountability.
India scored high with incentivised pay structures, while New Zealand and Canada scored high with minimal political interference, a high level of transparency and independent salary approvals.
Outa’s research had South Africa scoring low in all departments
The group concluded that ministerial and board discretion in South African SOEs made remuneration decisions comparable to political events.
By contrast, New Zealand and Canada had standardised salary structures that were set by an independent arm of government.
On transparency and accountability, Outa suggested replicating Canada’s system, which prevents the “inconsistent, often delayed, and sometimes incomplete” reporting structure in South Africa.
“Canada’s open government model, which mandates public access to real-time remuneration data, demonstrates how transparency strengthens accountability and public trust.”
“The lessons from New Zealand, India, and Canada show that structured pay frameworks, performance-linked incentives, and robust transparency mechanisms are not only feasible but also essential for South Africa to restore credibility and functionality in its SOEs,” Outa’s report states.
Protecting public funds
South Africa has at least 120 SOEs and smaller bodies that are funded and answerable to the government.
Outa acknowledged that focusing on three SOEs would not paint the whole picture, but was still “illustrative of systemic governance failures” in South Africa.
Following the string of bailouts, Eskom had eventually all but eliminated load shedding, and Transnet has kick-started its freight logistics through the signing of multiple public-private partnership
However, SAA remains in limbo after the failed 51% sale to a private consortium and remains the sole property of the Department of Public Enterprises.
Outa will use this and future data to create targeted, decisive legislative proposals and meaningful engagements with parliamentary bodies throughout 2026.
Outa’s ultimate goal is to protect public funds by closing governance loopholes and ensuring strict consequence management
“If boards are rewarded despite institutional failure, we entrench decline. If we align pay with performance and accountability, we send a different message. Deliver, or step aside.”
“Remuneration reform is not a technical exercise. It goes to the heart of fiscal stability and constitutional governance,” Pasensie stated.
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