JOHANNESBURG (miningweekly.com) - The war for talent might turn into executives asking “where do I find a job”, South African executive pay company Mabili said on Tuesday, as global market turmoil continued in the wake of US financial instability.

Mabili MD Laurence Grubb told Mining Weekly Online that retrenchments were taking place in certain industries globally.

“We need to see what pans out over the next six months to a year in terms of this global shake-up,” Grubb said, on releasing the 'Mabili Directors’ Remuneration Report 2008', which showed the mining and financial sectors to be South Africa’s highest payers.

“From what I can understand, effectively the US is the consumer of the world and China produces for the US and South Africa produces for China, in a sense, so if the US stops consuming, China will stop producing, and we will stop getting orders.

“I don’t know if that’s what is going to happen, because perhaps China has itself become a sufficiently large consumer to actually continue its own growth, in which case South Africa will be alright,” Grubb hypothesised.

But already there was a huge global swing away from excessive executive remuneration.

The “traditional vanilla stock option” – a pay perk that made US executives very wealthy, irrespective of performance – was dead, Grubb said.

The pendulum had swung towards the UK model of rewarding performance.

“Yes, we are heading for a new era, but we are not there yet, and there are still plenty of scallywags out there,” he said.

By and large, however, many organisations were paying executives “very sensibly”, and the days were past when executives received high pay “just because they were there”.

“It’s quite an admission for people in the US to say that they are going to follow the UK model, but that’s what’s happening,” Grubb said, adding that the UK model paid “sensible” guaranteed pay, which was benchmarked against competitors, as well as short-term incentives based on the performance in the year concerned.

South Africa’s mining and financial sectors fared best in Mabili’s latest report, with guaranteed pay in mining tending to be higher and bonuses tending to be higher in the financial sector.

“Slightly different pay models, but both competing neck-and-neck for the highest total pay,” he said.
Mabili found that 23 CEOs left their organisations ahead of the end of their term in 2007, compared with 12 in 2006 and only two in 2005, some with far more remuneration than others.

A comparison of two prominent mining executives who resigned abruptly in 2007 showed one being paid ten times more than the other: former Anglo Platinum CEO Ralph Havenstein received R37,3-million while former Harmony Gold CEO Bernard Swanepoel received R3,6-million.

Murray & Roberts CEO Brian Bruce was South Africa’s highest paid executive in 2007 at R99-million.

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