Two Transnet executives who were forced to resign receive R30 million

Transnet’s former CEO Portia Derby and CFO Nonkululeko Dlamini, who resigned following the company’s decline, received a combined R30 million over the last year.

Derby and Dlamini served as executives and board members at Transnet, but their employment was terminated during the financial year.

In September 2023, Derby and Dlamini resigned following pressure from business lobby groups, mining companies, and unions.

One of the lobby groups was the DA, who accused Derby of corporate sabotage and said she must be fired.

The Pietermaritzburg & Midlands Chamber of Business said Derby displayed indifference to attempts by businesses to help resolve the inefficiency at the port of Durban.

Inefficiencies, vandalism, and theft of Transnet’s freight rail network are still costing the country billions in lost exports of coal, iron ore, and other commodities.

In its latest annual report, Transnet revealed that it paid Derby R16.882 million in the 2024 financial year, double what she earned the year before.

Her pay package included a basic salary of R4.541 million, retirement benefits of R417,000, and ‘other payments’ of R11.923 million.

Other payments included payments made in accordance with the termination agreements entered into between the parties.

Transnet added that these payments were made after the necessary approval by the relevant governance structures.

The company did not clarify what the termination agreement entailed and what the relevant government structures were.

Dlamini received R12.779 million, including a basic salary of R3.558 million and ‘other payments’ of R9.220 million. This was also double the previous year’s payment.

What is striking is that Derby and Dlamini’s pay packages were significantly larger than those of any other Transnet executive.

Michelle Phillips, Transnet’s new group chief executive officer fixing the struggling state-owned enterprise, received R5.575 million.

It should be noted that Phillips worked for the full financial year, while Derby and Dlamini only worked for part of the year.

Derby and Dlamini’s high remuneration came amidst an existential financial crisis at the rail and ports company.

The company suffered a loss of R7.3 billion over the last year, and its borrowings ballooned to R138 billion.

Transnet previously admitted it is in a debt crisis, paying roughly R1 billion a month to service its growing debt pile.

Its auditors highlighted that Transnet is in serious financial trouble and faces an uncertain future.

The directors acknowledged material uncertainties related to events or conditions that could cast significant doubt on the entity’s ability to continue as a going concern.

Some consolations are that the recovery plan and the financial support from the government have helped the company.

The directors believe Transnet will have access to sufficient resources and facilities to sustain its operations and fund its capital investment programme.

However, it raises the question of why two former executives who were in charge when Transnet’s decline happened received such big pay packages.