The Office of the President and Cabinet is draw up guidelines for remuneration packages for all state enterprises, local authorities and grant aided institutions from early next year, Finance Minister Patrick Chinamasa announced in Thursday.
He did not give a specific date but said the government was concerned about the high remuneration packages that top management of these enterprises were paying to themselves when their enterprises were not making any money.
As a result some of the institutions were borrowing money for these salaries from commercial banks and after failing to pay back they called upon government to bail them out.
“In this regard, the Office of the President and Cabinet is spearheading the development of the guiding Remuneration Framework for all entities that make or are likely to make a charge on the Consolidated Revenue Fund with effect from early 2014,”Chinamasa said.
“This framework will tighten Governance oversight structures over remuneration, giving consideration to ability to pay, taking account of service delivery targets, as well as rewarding corporate performance that is above targets.”
The case currently under the spotlight is that of Zimbabwe Broadcasting Corporation Chief executive Happison Muchechetere whose package totalled $39 000 a month when workers had gone unpaid for six months.
Below is the statement in Chinamasa’s own words
Employment Costs in Local Authorities, Public Enterprises & Grant Aided Institutions
410-Mr Speaker Sir, Government is concerned by the extent to which employment costs tend to crowd out the conduct of the core business of most of our public enterprises, including our local authorities and grant aided institutions.
411-Sadly, the unsustainable employment costs are largely on account of the huge salaries, allowances, and perks being paid to top management – contrary to the Corporate Governance Framework for State Enterprises and Parastatals over principles of affordability, and sustainability.
412-Not only is some executives’ remuneration beyond the capacity of the institutions themselves, but are financed from commercial borrowings. In some cases, these institutions are failing to meet their wage payments on time.
413-Government ends up being called upon to bail out these entities, with incessant calls for debt assumption and Budget appropriations.
414-In this regard, the Office of the President and Cabinet is spearheading the development of the guiding Remuneration Framework for all entities that make or are likely to make a charge on the Consolidated Revenue Fund with effect from early 2014.
415-This framework will tighten Governance oversight structures over remuneration, giving consideration to ability to pay, taking account of service delivery targets, as well as rewarding corporate performance that is above targets.
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