- Eskom employee costs rise by R8.3 billion in one year to R45.4 billion despite ongoing financial strain and state support.
- Incentive payments of about R5.4 billion and restored bonuses drive sharp increase in remuneration across the utility.
- Questions mount over sustainability as municipal arrears reach R111 billion and debt relief package exceeds R254 billion.
In its address to Parliaments Standing Committee on Appropriations last week, South Africa’s state owned power utility Eskom has recorded a sharp escalation in its salary and incentive bill while continuing to depend on government support to remain operational.
Employee costs rose by R8.3 billion in a single financial year, increasing from R37.1 billion to R45.4 billion, driven by higher salaries, expanded headcount, and the return of performance linked bonuses. The utility also increased its workforce from 40,625 to 42,030 employees during the period, despite public commitments to contain costs.
Executive remuneration also increased significantly, with the chief executive’s pay rising by nearly R5 million in the 2025 financial year. Across the organisation, employees received an average salary increase of R167,000, described as the largest nominal increase recorded at the utility.
Eskom staff received an average annual remuneration of about R1.026 million in the 2025 financial year, while total employee benefit costs rose by 37% over two financial years, adding more than R300,000 per employee on average. Total employee benefits increased from R35 billion to R48 billion over a two year period.
The scale of remuneration growth comes as Eskom continues to rely on state support to stabilise its balance sheet. The utility has benefited from a government debt relief programme initially designed to absorb more than R254 billion of its liabilities, alongside ongoing fiscal interventions aimed at sustaining operations during periods of financial and operational distress.
A significant driver of the cost increase has been the reintroduction of performance based incentives. Eskom paid out approximately R4.2 billion under its short term incentive scheme in the 2025 financial year, alongside about R1.2 billion in monthly production bonuses, bringing total incentive payments to roughly R5.4 billion. This equates to an average bonus of around R128,000 per employee.
Company leadership has argued that the incentive structures are linked to improved operational efficiency, productivity gains and early signs of financial stabilisation. Management has also stated that bonuses are funded through internal performance outcomes and are aligned with the requirements of the Debt Relief Act.
Additional explanations provided in parliamentary engagement highlighted that Eskom had reintroduced bonuses after several years of suspension due to financial constraints and operational underperformance. The utility also pointed to wage agreements, overtime costs and skills retention pressures as contributing factors to the rising employee expenditure base.
Despite these justifications, concerns persist over affordability and governance. Five top executives were eligible for long term incentive payouts exceeding R32 million at the end of March 2026, further intensifying scrutiny over executive remuneration structures.
Political and public criticism has focused on the timing and scale of the increases, particularly as electricity tariffs continue to rise and demand for Eskom generated power declines – arguing that the utility’s financial improvements are heavily dependent on state backed debt relief rather than operational turnaround alone.
Municipal arrears owed to Eskom have further compounded concerns, with outstanding debt reported at approximately R111 billion as of June 2026. Critics warn that rising unpaid municipal bills, combined with elevated employee costs, place additional pressure on the utility’s long term sustainability.
Eskom maintains that its financial trajectory reflects a recovery process shaped by structural reforms, improved operational performance and regulatory engagement over recent years. However, the scale of salary and bonus increases continues to raise questions about the balance between employee remuneration, fiscal support and the cost of electricity to consumers.
Author: Bryan Groenendaal
