The Big Think Business and Society
Tsele Moloi June 2017
Inhumanity in the C-suites We have witnessed yet again the Occupy JSE movement this time led by the Members of the greater local mining communities’ business forum accompanied by the memorandum to request that investors in mines understand the plight of the poor and the poverty of the miners and their families
Nearly fifty years ago Dr Martin Luther King in his speech termed “Other America” as a preparation to launch a “Poor People’s Campaign” said “One America is flowing with the milk of prosperity and the honey of equality, that America is the habitat of millions of people who have food and material necessities for their bodies, culture and education for their minds, freedom and human dignity for their spirits. . . . But as we assemble here tonight, I’m sure that each of us is painfully aware of the fact that there is another America that were plagued by “inadequate, substandard and often dilapidated housing conditions,” by “substandard, inferior, quality-less schools,” by having to choose between unemployment and low-wage jobs that didn’t even pay enough to put food on the table, and that other America has a daily ugliness about it that transforms the buoyancy of hope into the fatigue of despair.”
In this tough times within society something very interesting and contrary to the realities on the ground is happening. The C-suites is indeed enjoying the world of “milk of prosperity and honey of equality” with no sensitivity whatsoever. There is serious distance between the C-suites and reality on the ground, there is indeed no humanity in the C-suites. A new study by the Accounting firm Deloitte shows that Senior executives at JSE Top 100 companies are coining it at an average of R69,000 a day or a total pay package of R17.9-million a year. The report tells us that executive guaranteed pay increases in general have well exceeded inflation in the past five years.
With this in mind I believe Dr King was prophesising South Africa 23 years after the dawn of Democracy. South Africa that is not growing economically, is deep in recession and has recently been downgraded to junk status. A country where unemployment sits at a 14-year high at 27.7% and expanded definition, which includes people who have stopped looking for work, sits at 36.4%. A country where those who are working are not guaranteed fulltime employment, even those who are on fulltime employment are still do not guaranteed the minimum wage let alone the living wage. Most of the working class are working very hard yet still do not have the wherewithal to forge ahead while those at the top are ensconced in the C-suites enjoying the sweat and tears of those at the bottom. In this day and age we still have our people being called the “working poor”. Indeed “This country has socialism for the rich, rugged individualism for the poor.” further contend Dr King. This tough times have seen the contingent of the red beret in 2015 marching to occupy the JSE citing “the pain of poverty” as the reason for their march. The same happened in 2017 May Day when SACP and Cosatu marched to the JSE citing lack of meaningful transformation as the reason for their march. .
According to Leslie Yuill, Deloitte's actuarial, reward and analytics leader, companies' remuneration reports often "provide little or no explanation as to the cause or reason for these trends". “The study found little correlation between CEOs' guaranteed pay and the size and complexity of the organisations they were managing - particularly for companies with market capitalisation of between R5-billion and R50-billion” said Yuill.
This is the kind of behaviour giving capitalism the wrong name and lead to its onslaught. 1
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It is indeed very hard to find justification of what causes the Csuites to earn so excessively while average employees are earning less and less. Is there any justification for the C-suites to earn 500 times more than average employees? Even the ideology of meritocracy cannot justify this concerning trajectory. It cannot be that the C-suites will claim hard work as if they are the only one who are working very hard without the help of the average workers. The problem with the C-suites pay is, it is not even aligned to corporate performance. If It cannot be justified it can only be called what it is, a sheer greed, immoral and indeed inhumane on the side of the C-suites. This is the kind of behavior giving capitalism the wrong name and lead to its onslaught. The question I have is, Have the CSuites ever witnessed the pain of a working parent who is depriving her child opportunity to get to University because she cannot afford while working? Have they ever witnessed a pain of a parent who cannot afford to buy their children bread for lunch box while they are working, have they ever witnessed the pain of a parent who finds it difficult to share her salary to everyone of her children while they are working. These are people who have never witnessed the struggles of their employees who are today being called the “working poor”.
This behaviour is not value creation but the extraction and transfer of value from corporate core capabilities to the C-suite. This kind of behavior from the C-suites is not creation of value in fact it is extraction of value and transfer of value from other stakeholders to the C-suites. It is transfers of value from average employees, transfer of value from shareholders, transfer of value from consumers, and most importantly transfer of value from society at large. It is transfer of value because Instead of C-suites devoting and investing this resources in the productive capacities such as research and development (R&D), additional jobs, higher wages for average workers, or dividends to shareholders, insourcing of workers, education and skills of prospective working capital, onthe-job training, a healthcare system that reaches many in society and strengthening workers voice through strong unions, instead the C-suite is taking this resources for themselves. In 1776 Tom Paine once said “We have it in our power to begin the world over again” Clearly something different needs to be done, we need to re-imagine the new future, and we need to reimagine capitalism. The toothless JSE cannot take us far. What we really need is to reimagine a JSE that has teeth to help curb the scourge of C-suite pay and to assist with transparency.JSE that will build a strong rule book that will alleviate us from the Csuite greed and immoral behavior. We need to envision a humane C-suites. Indeed we need to envision a new future that works for everyone of society instead of the few KBR
Tsele Moloi is an Editor in Chief at Katalytik Business Review and a columnist.
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