KEY POINTS
- Eskom paid R5.4 billion in bonuses in 2025 despite ongoing financial strain, sparking public and political criticism.
- The utility argues the incentives reward improved performance, but unions and opposition parties say the payouts are excessive and poorly timed.
- Financial challenges persist, including high municipal debt, irregular expenditure, and auditor concerns over overstated savings.
South Africa’s state-owned power utility, Eskom, has come under renewed scrutiny after disclosing that it paid about R5.4 billion in staff bonuses in the 2025 financial year, despite ongoing financial pressures, rising electricity tariffs, and mounting debt owed by municipalities.
The bonuses were part of a reintroduced short-term performance incentive scheme, which had been suspended for six years due to Eskom’s weak operational performance and financial constraints. The utility argues that the return of the scheme reflects improving performance and that motivating staff delivers long-term value that outweighs the cost.
The bonus payments have triggered strong criticism from opposition parties, particularly the Democratic Alliance, which described the payouts as “unacceptable” given ongoing electricity price increases, financial instability, and rising municipal arrears.
DA energy spokesperson Kevin Mileham argued that the profits are misleading, calling them a “statistical mirage” due to significant state bailouts received during the same period.
Meanwhile, the National Union of Metalworkers of South Africa has escalated tensions by declaring a deadlock in wage negotiations with Eskom. The union rejected a proposed 7% annual wage increase over three years, citing disparities between worker pay and executive remuneration.
Numsa has also raised concerns over executive compensation, alleging significant salary increases at senior levels, claims which Eskom has dismissed as inaccurate.
Additionally, auditors issued a qualified opinion, citing overstated savings from internal turnaround initiatives.
While Eskom maintains that its financial improvements reflect progress, critics argue that its underlying risks remain unresolved and that governance issues continue to undermine recovery efforts.
