13 December 2012

South Africa: Reserve Bank Chiefs Take Salary Freeze

Reserve Bank Governor Gill Marcus, along with the Bank's executive and non-executive directors, will forgo salary and fee increases in 2013 in light of the prevailing economic climate, South Africa's central bank said 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 on 30 November. The decision does not apply to Reserve Bank staff and general management.

The Bank said this was in support of President Jacob Zuma's call on chief executive officers and executive directors in the private and public sectors to agree to a freeze on increases in salaries and bonuses over the next 12 months, as a signal of their commitment to building an equitable economy.

Zuma made the call at a meeting with labour and business representatives in October. He said there was a need to stimulate South Africa's economy in the face of deteriorating world markets and labour unrest in the country.

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

At its monetary policy committee meeting in November, the Bank expressed concern at the recent trend of high wage settlements in South Africa, saying these could have a 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," the Bank added.

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