NEF CEO earns in line with sector peers

NEF CEO earns in line with sector peers
The misrepresentation of facts in a media statement attributed to the Democratic Alliance (DA) in respect of the remuneration of the Chief Executive Officer of the National Empowerment Fund is disappointing and unfortunate, says the Board of Trustees of the development financier.
“The CEO of the NEF is most definitely not the highest-paid public official, and her salary did not increase by 44, 75%. Also, the CEO did not ‘reward herself with bonuses’, as claimed in the statement. As a public institution the NEF is transparent and accountable about the remuneration of its executives and trustees, and the details about this are published annually in the financial statements of the organisation,” says Acting Chairman of the Board of Trustees,Mr Rakesh Garach.
He says the CEO’s remuneration increased by 10% in April 2014. In the year ending 2013 the CEO did not receive any salary increase, therefore on average the CEO of the NEF received an increase of 5% over the past 2 financial years. All this information has been in the public domain.
“In accordance with good corporate governance practice, the authority to grant performance bonuses rests exclusively with the Board of Trustees of the NEF. The Board exercises this authority independently, and neither the CEO nor the executives of the NEF possess the operational authority to alter their remuneration or to grant themselves any performance rewards,” adds Mr Garach.
The CEO of the NEF has been at the helm of the organisation for the past 10 years, and during this time the NEF has accomplished several operational milestones, including the following:
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Approved 549 transactions worth more than R5,4 billion for black empowered businesses across the country,

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Secured unqualified external audit opinions for 9 years running,

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Supported in excess of 47 000 jobs countrywide,

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Together with local and international partners the NEF has developed 20 strategic and industrial projects worth R30 billion, with the potential to support over 80 000 jobs.

“We must assert that during the period of the moratorium the NEF did not shut own. Instead the NEF disbursed more than R600 million and approved over R400 million for black enterprises, and established the Turnarounds, Workouts and Restructuring unit, which is responsible for rehabilitating and stabilizing distressed businesses.
The cash collected during the period amounted to 84% more than 2013 collections, having grown to an unprecedented R351 million.
“The NEF also progressed half of its industrial projects to commercialisation. Examples are BusaMed, which began the construction of the first of its four hospitals, and important milestones reached on the renewable energy front, where a potential industrial giant, Mabele Fuels, will begin the process of converting sorghum into biofuel. When the moratorium lifted the NEF announced that R950 million was available to fund entrepreneurs and to help develop black industrialists. The NEF has been and will continue to discharge its mandate with merit,” said Mr Garach.
When the CEO was appointed to her portfolio the NEF had approved only 16 transactions worth R35 million. The Board of the NEF is satisfied that the executives of the NEF are valued assets to the organisation and possess the necessary track-record, leadership credentials and qualifications worthy of retention. It is the view of the board that the CEO earns comparatively in line with her peers in the financial services sector and among state-owned commercial enterprises. We are confident that the annual reports of the various institutions will corroborate this assertion.
The NEF maintains a compensation and remuneration system which provides for the remuneration of employees on a scale comparable to those paid for similar positions in the industry. As directed by the Board of Trustees, the NEF remunerates its employees at the 50

th percentile of the industry survey. The survey includes both private and public entities, comprising in excess of 700 companies. In accordance with standard industry practice, the NEF remunerates high-performing employees between the 50th and 75thpercentiles in order to retain individuals that are highly sought-after in the financial services sector. The CEO, however,  and remunerated below the 50th percentile.

As outlined in the Annual Report 2014, tabled at Parliament in August 2014, the NEF is a high-performing organisation that has continued to register new and significant milestones in the implementation of its mandate. These meaningful accomplishments are a direct result of a competitive skills-management strategy that has ensured that the NEF attracts and retains rare and highly competitive talent for the pursuit of its mandate, which is to strive for an inclusive economy.