By Lehlohonolo Lehana.
Telkom paid its former group CEO, Sipho Maseko, R20-million in retention bonuses in the past two years plus a R32-million restraint to prevent him being poached by competitors.
This comes on top of a R10-million retention fee paid to Maseko in the previous financial year.
Maseko resigned last year, stepping down as CEO on 31 December, though he remained available to his successor Serame Taukobong as an adviser for a further period.
Shareholders raised concerns over the large retention payments Maseko received, which amounted to R20 million in cash over two years.
“The board considered it to be strategically important to retain Maseko’s services for a minimum period of two years, “Telkom’s integrated report for the 2021/22 financial year states.
Telkom’s board argued there were several key reasons they decided it was essential to ensure the company retained Maseko:
°Several of Telkom’s largest competitors were in the market for new executives.
°Certain strategic matters, including Telkom’s restructuring and the spectrum auction, were still underway.
Under the terms of the board’s retention agreement with Maseko, he had to remain at the company until 31 March 2022.
If he resigned during the retention period, he would have been expected to repay the gross amount, including the tax portion, up to the exit date.
However, the Telkom board stated that Maseko remained in an advisory capacity until 30 June 2022 to help complete “selected strategic matters”.
In addition to his retention payment, Telkom also concluded a restraint of trade agreement with Maseko running for 12 months from his last day on 30 June 2022.
A taxable restraint amount of R32 million is payable on 1 July 2022.
“No restraint agreement was in place or concluded in Maseko’s initial employment contract in April 2013,” the report stated.
“In the absence of a restraint of trade being concluded when Maseko joined Telkom in 2013, and given the significant influence that he had as GCEO of Telkom over eight years, the Board agreed that it was in the best interests of the business to engage with Maseko and agree on terms of a restraint agreement.”