12 December 2012

South Africa: Reserve Bank Heads to Take a Salary Freeze

Pretoria — Reserve Bank Governor Gill Marcus, the bank's deputy governors, together with the bank's board members - have decided to forgo salary increases in 2013 - given the global economic outlook, said the central bank.

"In response to the prevailing economic climate locally and globally, the Governor and Deputy Governors of the South African Reserve Bank (SARB), together with all Board members, unanimously decided to forgo salary and fee increases for non-executive and executive directors in 2013," said the central bank on Tuesday.

Marcus, her three deputies - Francois Groepe, Daniel Mminele and Lesetja Kganyago - as well as all board members unanimously decided on this at a board meeting held on 30 November this year.

The central bank said this was in support of President Jacob Zuma's call to chief executive officers and all executive directors in the private and public sectors to agree to a freeze on increases in salaries and bonuses over the next 12 months.

The decision however does not apply to the SARB staff and general management.

At a meeting in October with social partners (including labour and business) the President said there was a need to stimulate South Africa's economy in the face of deteriorating world markets and labour unrest in the country. At that meeting a call was made to chief executives and leaders of business to freeze salary increases and bonuses over the next 12 months as a signal of commitment to building an equitable economy.

The governor has on previous occasions spoken out against high remuneration packages of executives. Marcus has also spoken on high wage demands of unions.

At the last Monetary Policy Committee Meeting (MPC) of 2012 in November, the central bank expressed concern at recent wage settlements.

"The MPC is concerned about the recent trend in wage settlements and the potential negative impact on the economy, particularly on growth and investment. These developments could also result in lower growth in employment creation or an absolute decline in employment."

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