How much would you pay someone to keep South Africa’s lights glowing? What price should you put on leadership in a state-owned entity (SOE)? It’s an apposite question, which goes to the heart of remuneration philosophy and comes amid blistering criticism of someone who might have thought he’d bought himself some latitude: Eskom CEO Dan Marokane.
Efficient Group chief economist Dawie Roodt has taken issue with the fact that the monopoly electricity provider paid Marokane R11.7m last year. “You’re paying somebody to actually drag the economy down,” he said on a podcast.
Roodt tells the FM that in the first quarter of this year, the electricity, gas and water sector’s year-on-year contribution to GDP was -4.6%, after a less-than-stellar 2025.
“That is the growth rate in this corner of the economy, which is dominated by Eskom. So this tells you that Eskom is still a handbrake on growth, so why should we reward its CEO for this?” he asks.
Roodt’s view is controversial, given that Marokane’s tenure as CEO since March 2024 has coincided with (fingers perpetually crossed over white knuckles) the end of load-shedding.
Marokane and Mteto Nyati, the former MTN executive who has been Eskom’s chair since October 2023, have done what any number of their predecessors failed to do — and those failures had disastrous consequences.
The Council for Scientific and Industrial Research estimated that South Africa’s economy lost out on more than R5.5-trillion over the years due to load-shedding, peaking at R2.8-trillion in 2023. For 2023, this slashed the country’s growth rate from 2.5% to its eventual 0.7%.
You’d think paying Marokane R11.7m is a small cost for stability. If you were to pass a hat around most C-suite offices in Sandton, they’d probably chip in another R12m in quick time.
It evokes Christo Wiese’s defence in 2011 when tackled on why Shoprite, which he chaired, paid CEO Whitey Basson R627m that year.
“Whitey built a R1m company into a R53bn company. If I could find another Whitey Basson, I would happily pay him a billion. A guy with his talent is terribly rare. And the performance is there,” he said.
Roodt, however, doesn’t buy the argument that Marokane’s payment is justified by the impact of Eskom’s stability on the wider economy.
“Let’s say you appoint a new police commissioner, and he succeeds in bringing crime down by 20%. That would create economic gains that might exceed those we got after load-shedding ended,” he says. “But should we pay that policeman a bonus for doing his job? I’d argue not.”
Marokane’s bonus was actually a small part of the package. Of the R11.7m, R9m was his salary, R1.96m was his sign-on fee, and R765,000 was the bonus. Last year was the first time Eskom had paid bonuses since 2017, according to its annual report.
“The reintroduction of variable remuneration also forms a central component of Eskom’s executive retention strategy, recognising that competitive incentive structures are essential to retaining the specialised leadership talent required to drive Eskom’s turnaround,” it said.
This is an argument often made cynically to justify a giddying rise in pay for some already overpaid executive.
But here, a R765,000 bonus for keeping the lights on would, I suggest, be money well spent. It is the equivalent of solar systems for just 10 homes. “Close Eskom for a few hours, and see what happens,” one Eskom staffer tells the FM.
The bonuses come with strings attached too. Executives have to meet certain conditions, including ensuring the “reliability of electricity supply” and “providing for future power needs”.
There are also four “gatekeeper conditions”: keeping “unplanned generational plant unavailability below 14,000MW”; maintaining operating cash flow above R55.7bn; a lost-time injury rate below 0.30; and getting an unqualified audit report.
But retaining skills in an SOE is vital.
Look what happened to the National Prosecuting Authority, which, in the years after the ANC-led government killed the Scorpions, shed many skilled prosecutors to private forensics firms. The consequence is the quality of unreliable law enforcement we see today.
Again, Roodt doesn’t buy it. “If your argument is that unless you pay large bonuses, you won’t attract the best people, then you have to ask, where do you need the best people — in the civil service or the private sector? I’d say the answer has to be the private sector, since this is the wealth-creating part of the economy,” he says.
Perhaps one reason Roodt is less than charitable is that he doesn’t buy the narrative that Marokane and Nyati saved Eskom. He credits them with improving management, but not with halting the blackouts.
“There are many reasons Eskom stabilised, of which better management is only one element,” he says. “First, electricity productivity improved sharply, by 20%, which means people are using power more efficiently than they used to. And second, because private households and companies began generating a whole lot of their own electricity.”
Why pay someone a bonus for making its product less attractive and driving away its customers, he asks.
It’s a fair point, and there are certainly other factors which should come into play in crafting a fair pay policy for an SOE, including the efficient use of taxpayer money.
But this should also recognise pragmatic realities.
Roodt argues that dishing out bonuses for keeping the lights on would be like praising a duck for swimming. However, if that duck had forgotten how to swim, and the entire pond’s existence depended on its aquatic ability, maybe a little bit of praise isn’t such a sacrifice.