Zwelakhe Mankazana, a director of empowerment group Cellsaf, which owns 7.5% of Cell C, isn’t happy: "If you look at Cell C’s net proceeds of this recapitalisation of R4.1bn, it seems crazy to be paying a R357m ‘success fee’ to a group of executives who’re already remunerated just for doing their jobs. And this is above the R219m paid to two or three executives."
Mankazana says that as shareholders, Cellsaf "feels defrauded" by these lavish payments made from shareholders’ funds.
The 391 staff seem equally miffed.
On August 24, they wrote to Cell C’s chair, Kuben Pillay, saying they had been told that Cell C wasn’t able to pay full bonuses "due to tight budget and financial constraints". Yet, they said, immense sums were paid to executives, which "does not speak to fairness".
A few days later, Cell C’s human resources executive, Juliet Mhango, wrote to the staff, arguing that all staff benefited from various incentive schemes. On the "success fee", Mhango said the recapitalisation "was a necessary intervention to prevent the closure of the company and the loss of every job".
And she said even though Cell C didn’t hit its targets, the board agreed a "discretionary bonus" for the lowest-paid staff.
This didn’t impress the staff. They wrote back asking why Pillay had not responded, since it was the board that made the decision. Any response from the executives "compromises the legitimacy of your response as these individuals are at the centre of the contentious issues raised", they wrote.
They added that despite what was claimed, the discretionary bonuses were "made to a select few". They also asked for Cell C’s financial statements to confirm "that the company is indeed in dire straits".
On September 6 Pillay wrote back to the staff, encouraging them to lodge a formal grievance if they wanted to, but adding that "none of the payments" was paid in a "dishonest or unauthorised manner".
Ironically, the problem seems to be that Cell C’s communication with its own staff is abysmal. In fact, its communication with anyone is shoddy, it seems. When the FM asked specific questions about its payment practices, Cell C refused to answer. Instead it provided a bland "official comment" saying absolutely nothing new.
As a company 60% owned by JSE-listed companies, you’d think Cell C could be a bit more transparent. For a company talking boldly about listing on the JSE either next year or in 2020, its shoddy level of transparency suggests it’s nowhere near ready.
