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I see the media reported Whitey Basson, CEO of Shoprite, getting paid 100 million, 49.7 million pay, and a 50 million bonus.
An article then has two case studies, that says : Phumla (not her real name), who works in the deli department at a Checkers store, earns R550 a week. At R28,600 a year, it would take her nearly 3,500 years to earn what Basson earned this year. She works a nine hour shift. She spends R500 of her salary on rent every month and up to R320 on transport. With the rest she buys food and sends money home to her parents in the Eastern Cape.
Another case : Nosakhele (not her real name) works for House & Home, also part of the Shoprite group. She earns a basic salary of R2,700 a month, and depends on commission from sales. Nosakhele would have to work for more than 250 years to make as much as Basson did in a month. She too works nine hour shifts. She catches two taxis just to get to work, spending R42 daily on the return journey, or R840 a month. "At the end of the day I am left with nothing" she says.
Aaaaaa, the battle across time against those that have, and those that don't have. Lets analyze this a bit. A quick look at what Checkers is. According to the Deloitte Global Powers of Retailing survey for 2015, Shoprite Holdings was named the number one retailer in Africa and the Middle East. Shoprite Holdings Ltd comprises the following entities: the Shoprite Checkers supermarket group, which consists of 577 Shoprite supermarkets; 202 Checkers supermarkets; 37 Checkers Hypers; 355 Usave stores; 387 OK Furniture outlets; 35 OK Power Express stores; 22 OK Dreams stores; 53 House & Home stores; 187 Hungry Lion fast food outlets; 160 MediRite pharmacies and 335 LiquorShops. Its ticketing business, Computicket, operates 1347 counters in Group stores and 32 free-standing outlets. Through its OK Franchise Division, the Group procures and distributes stock to 66 OK MiniMark convenience stores; 34 OK Foods supermarkets; 72 OK Grocer stores; 24 Megasave wholesale stores; 28 OK Value stores; 61 Sentra stores and buying partners, as well as 31 Friendly supermarkets; 3 Friendly Liquor stores; 5 OK Express and 35 OK Liquor stores. Shoprite Group employs almost 138,000 people of whom 21,000 work outside South Africa.
Shoprite has boosted turnover 14.4 percent to just over R130 billion in the year to June 2016. net income grew to R4.3 billion from R3.7 billion. No people, they did make 130 billion profit, they made 4.3 billion profit. That is, 4,300 million. I know many will see 130 billion and think they made that much profit. Turnover means all your expenses first have to be subtracted, and what is left is the profit.
I can add tons of more info, from the web. But bottom line, this is a mega company, a giant in SA, giving 138,000 people jobs, and paying taxes in the billions to government. At the head of this vast empire, you have a man running it, Whitey Basson. He must be hailed and his feet kissed. Obviously he must be doing a good job running it, else it would not be so successful. Do the writers of the articles care what work Basson did, what he achieved, what he contributed. No, we do not care about that. We care only that he got paid 100 million rand, this year, and Phumla got R28,600.
So his pay is 49.7 million a year, what is that, about 4.15 million a month. And he gets a 50 million rand bonus, for achieving incredible results for the company, and for the country, in tax, and for employing 138,000 people. They made 4,3000 million profit, so they gave 50 of this, to him. In my view 50 out of 4,300 is very little, isn’t it. I actually think 5% of that amount would be more fitting.
But bottom line, what is it about, it is about him getting 100 million for the year, and Phumla, the polony slicer in the deli, getting R28,000 for the year. That is what it is about. All think, hell this is unfair, why must she get this little and he this much, I mean, they both work 9 hours a day, or so it seems. Well, as someone that has experience in business, it is not about Phumla. You have to look at all 138,000 employees, not just 1. I am sure Shoprite can give Phumla a million, no problem, but why must she get 1 million, and not the other 138,000 staff as well ?
So, lets do some number crunching. Would all fell better if Basson worked for fee, getting no pay, or also got R28,600 a year ? Would we all be happy if he did not get that 50 million bonus ? Would you say they should rather have split that 50 million between the 138,000 employees. What would they have got, guess what, each employee would have gotten R362. Now you tell me, would the employees have been satisfied with the R362 extra a year. No, they would have complained to high heaven and said, goodness me cheapskate Shoprite, you make billions, and give me R362, what a disgrace. Phumla can catch a few more taxis, or buy a few groceries, then that money is gone as well.
So, he must not get it, but all employees would not be happy if it was split between them. I know, the employees are saying wait a minute, Shoprite made 4,300 million profit, why don't we split that amount between all employees. Lets see, yes that much better, each employee will now get a bonus of R31,159 a year, that’s not to shabby Nigel :-), that actually doubles Phumlas pay for the year, I think most would be happy with that.
So, the question is, why do Shoprite not split all their profit with the employees. Well, easy answer, how many ShopRite’s stores would there have been if Shoprite did this right from the start, when the first store was opened, easy, there still would only have been 1 store, and about 50 employees. Why would there not have been more stores, simple, because the money from the profit, is spend to expand, to open more stores. If you give it to employees as bonuses, then there can be no expansion. So if you wonder why, that is why.
But then employees will say, ja, but can't you give Phumla more than R28,600 a year. Ok, so how much must she get ? Difficult one this. Ask 100 people and you will get 100 different answers. I know some will say R28,600 is not bad for slicing polony in a deli, as there is no skill or education required for that, and 50 million people in this country can do that job. How many can do Basson's job. Let me tell you, very few. You really want to compare the two in ability.
But, as I said, Phumla alone is not the problem. Let say Shoprite want to give all an increase, and lets give each employee R500 more per month, R6,000 per year, what is the effect. Shoprite would then from next month, pay out R828 million more for the year, in salaries. If you say, but that is ok, they made 4,300 million profit, subtract the 828, that still leave them with 3,472 billion, so why not. Well, let me ask you, Phumla gets her R500 more a month, she is happy the first month, less happy the 2nd month, and by the 3rd month, she is exactly where she was. She now gets R34,600 a year, instead of R28,600 a year, or R2,900 a month. Will she be satisfied. No, she will spend the R500 extra, and nothing will change.
As to if R28,000 is a good salary or not, well, true to human beings, no matter what you earn, it is not enough, ever. If Phumla earns R200,000 a year, no doubt in time that will not be enough. So, no, no salary is every enough. But, lets turn it around, 138,000 people, have a job, if Checkers closes tomorrow, then 138,000 people, earn zero. So the question is more, do you want the R28,600 or do you want zero, which do you prefer ?
But, I invite anyone to start a business, and then you show us, how you are going to split all your profit between your employees, you yourself get little pay, and you yourself take no bonus, you basically working for your employees, and not them for you :-). It is amazing how people that scream for one thing, once they start a business, do exactly the same than what they were screaming about, then others scream at them, but by then, they understand how a business works.
Business people know, for this Shoprite empire, a pay of R49.7 million a year, is little. Obviously if Shoprite was not successful, they can not pay him that amount. They can only pay it if they are successful. Also 50 million bonus is not much looking at the scale of Shoprite. Also they can not pay it, if Shoprite was not successful. Unlike the SABC or SAA that pays themselves millions, even if they make a loss.
But bottom line, new stories like this give the impressions, that this man is getting money that he does not deserve, or earns. Gives the impression that he is stealing from the poor. Really, he is a saint, he gives 138,000 people a job. He pays billions in taxes, which if we had a great government, could use those billions to uplift the poor and give services. What do you want, must Basson earn R28,600 a year and Phumla the polony slicer get 100 million ?
So, lets say Whitey Basson decides, it is not worth it, all this, I assure you he does not need the 100 million. He decides to retire, and go fishing. A new CEO comes in, incompetent, and runs Shoprite into the ground in 3 years, like SABC and SAA, makes no profit, what is the effect, Simple, shops closing down, people losing jobs, less tax, as vicious cycle. So, the ones writing the article, want to focus on him, what he pays, but ignores what success he had, what he contributed, and what impact he had in the great Shoprite story. Sometimes I question the intelligence of news reporters, really. If you want to write articles, tell everything, don't focus on a thing you perceive negative here, and ignore thousands of positive points.
So, when will you be happy, if all 138,000 employees are unemployed, all Shoprite store closes its doors, then at least you can say Phumla and Basson now gets equal pay, they both get zero. Will you be happy then ? I definitely think each SA citizen need to get educated in basic economics, and catch a serious wakeup call. We don’t want 1 Whitey Basson getting 100 million, we want a thousand Checkers type companies out there, and 1 thousand Whitey Bassons getting 100 million each. Then this country will prosper and burst at the seams.
