PPC chief executive cuts own pay to increase wages

WHEN the next round of PPC salary adjustments takes effect in October, company chief executive Ketso Gordhan would earn only 40 times more than his lowest-paid worker, he says.

Meanwhile, Gordhan said on Tuesday, the company's new black economic empowerment (BEE) deal, which gives employees 12% share ownership, could generate R2-billion in value for PPC's employees over five years, if targets were reached.

When Gordhan took over as chief executive in January last year, he was earning 120 times more than his lowest-paid worker, he said at PPC's interim results presentation. But the company's drive to reduce the earnings differential had reduced this to a 48-times multiple. This followed Gordhan's R1-million pay cut in October, while the remuneration of his top 60 managers was frozen so that the wages of the cement maker's 1200 lowest-paid workers could be raised.

Gordhan said he would not take a pay increase this October and PPC's other executives would be awarded increases of about 4.5% to 5% – less than the usual 6.5%.

This would allow the minimum total pay package at PPC to be hiked to nearly R11000.

He said the 40-times multiple was seen by many as a justifiable spread. This was based on similar initiatives by US-based grocery giant Whole Foods, which has since extended this to cap executive pay at 19 times the average employee's salary. - Nick Hedley