Executive compensation: Where is transparency?

Public sector management

Opacity is not the way to go. The concept of “open-data government”, supported by a FOIA, is the new norm in advanced parliamentary democracies

By Prakash Neerohoo

Last week in Parliament, PMSD MP Adrien Duval asked a question to the Prime Minister and Minister of Finance about the salaries of the governor of the Bank of Mauritius (BOM) and its deputy governors, who were appointed by the present government after coming to power in November 2024. The Prime Minister did not provide any information on that matter and referred the MP to the financial statements of the BOM that are posted on its website. Many observers expected the Prime Minister to table the information in Parliament in the name of transparency, but he chose not to do so. He might have his reasons for not doing so, but is not the public entitled to know what public servants earn at the time they are appointed?

“At Air Mauritius Ltd., a loss-making company, the ex-CEO was drawing close to Rs 1 million in salary and benefits per month, as disclosed in his claim for damages following his dismissal by the new government. Public enterprises owned by the State should not be accountable only to their shareholders. They should be accountable to taxpayers who contributed their capital in the first place. They are expected to follow some financial discipline and adopt compensation packages that are commensurate with professional qualifications while considering the requirement of appropriate reward for financial results achieved…”

The referral to the BOM’s financial statements was indeed an ingenious way to avoid answering the question directly. When the Minister of Finance was queried about the allowances paid for overseas trips to top executives of the BOM ($1,400 per diem and $200 entertainment allowance per day), his reply was again elusive, referring the MP to the bank’s financial statements.

Late annual reports

We know that the annual report of the BOM, including financial statements, for the financial year ended June 30, 2025, will not be posted on the website until next year. Usually, the BOM’s annual report is posted more than six months after the end of the financial year. The last annual report posted on February 22, 2025, relates to the financial year ended June 30, 2024. According to that report, the former Governor of the BOM, Mr Harvesh Seegoolam, earned Rs 14,362,000 in the year 2023-2024, that is Rs 1,104,769 per month for 13 months. His two deputies earned each Rs 657,346 per month for 13 months. So, we can reasonably assume that the new governor and his two deputies are getting the same pay and benefits package as their predecessors, unless the BOM has reduced the compensation for its top executives, which is very unlikely.

Unlike the Minister of Finance, the Minister of Financial Services and Good Governance, Mrs Jyoti Jeetun, answered a parliamentary question on the emoluments of the CEO of the State Insurance Company of Mauritius Limited (SICOM), which operates as a public company under the Companies Act with state-owned bodies as major shareholders. She disclosed that the CEO got a pay and benefits package of Rs 14,712,375 last year (or Rs 1,131,721 per month for 13 months). When she was asked whether that generous package was justified since the CEO was not an actuary, but an accountant, she suggested that it was very high, especially for a public enterprise where the State owns 62% of shares. It seems that what is sauce for the goose (SICOM) is not sauce for the gander (BOM) because the same principle of disclosure does not apply in both cases.

The decision of the Minister of Finance not to disclose the pay and benefits package of top executives at the BOM in Parliament is curious to say the least. Probably he did not want to attract attention to the generous pay package because of the debate going on about the government’s decision to impose austerity on some citizens at a time of high budget deficit (9% of GDP) and soaring public debt (90% of GDP). Its decision to move up the eligibility age for old-age pension (OAP) from 60 to 65 years, gradually over five years, is hotly disputed by trade unions. The announcement of an income support of Rs 10,000 to those earning less than Rs 10,000 a month in the 60-64 age group, in lieu of OAP, has not lessened the grievance.

Legal ploy

We should note that this government (Alliance du Changement) came to power on the promise of restoring transparency and accountability in public administration as part of what was called a break (“rupture”) with past opaque practices. For too long, the previous government shrouded the management of public organisations in a veil of secrecy that covered corporate misfeasance on a large scale. Its default position was always to refuse to answer questions about their management, including the compensation of top executives in state-owned enterprises (Air Mauritius, SICOM, SBM, etc.) on the grounds that they were “private companies”.

As a matter of fact, the registration of those public enterprises under the Companies Act (not under specific statutes) as public or private companies was just a legal ploy to keep them outside parliamentary scrutiny so that the public would not know about their bad management practices, although the State is a majority shareholder in them. It is a rule that public or private companies owned by the State are not audited by the National Audit Office since they are not funded from the Consolidated Revenue Fund of government.

However, information has filtered in the media about abnormal pay packages in public enterprises. For example, it was reported that the CEO of SBM Bank (Mauritius) Ltd. had a package of Rs 40 million a year. How could one possibly justify such a humongous package at a bank that has written off bad debts in billions of rupees over the years (Rs 7 billion in 3 years) due to toxic loans granted to political cronies without adequate collateral? A write-off on that scale only proves a deficient credit risk-assessment system for which top management should take responsibility.

At Air Mauritius Ltd., a loss-making company, the ex-CEO was drawing close to Rs 1 million in salary and benefits per month, as disclosed in his claim for damages following his dismissal by the new government. Public enterprises owned by the State should not be accountable only to their shareholders. They should be accountable to taxpayers who contributed their capital in the first place. They are expected to follow some financial discipline and adopt compensation packages that are commensurate with professional qualifications while considering the requirement of appropriate reward for financial results achieved, and the notions of fairness and equity.

Public interest issue

Executive compensation in the public sector is an issue of public interest in all social-democratic countries where the State invests taxpayers’ money in public services and commercial enterprises. In Canada, for example, the province of Ontario, which is the largest sub-national government in the country, publishes annually a “Sunshine List” of public sector employees who earn more than $100,000 a year (or Rs 3.4 million at the exchange rate of Rs 34 per Canadian dollar). The list was introduced in 1996 by a conservative government. Over the years, trade unions have asked the government to raise that threshold to take into account inflation, but it has not done so. That threshold is indeed very low now by salary standards in the economy. The annual list, along with data on salaries over the threshold, is available on the government’s website for public viewing (https://www.ontariosunshinelist.com).

This disclosure practice is based on the premise that all taxpayers need to know how much public servants who are responsible for delivering public services are paid to do their jobs. Even big private corporations like commercial banks publish data on executive compensation together with quarterly or semi-annual financial results. Shareholders have a right to know whether executive compensation is commensurate with the financial results of corporations.

In Mauritius, the salaries and benefits of employees working in the central government, local government (municipalities and village/district councils) and some parastatal bodies are known to the public because the Pay Research Bureau (PRB) publishes the salary scales every five years. This is not the case for the broader public sector, which includes (a) public enterprises that are run on a commercial basis (CWA, CEB, etc.), (b) state-owned enterprises (Air Mauritius, SICOM, SBM, Airport Holdings Ltd.) set up as private or public companies, and (c) Public Interest Bodies such as the Bank of Mauritius.

Open data

The State has full control over all those body corporates either through shareholding or statute. For example, the State owns Air Mauritius, a wholly owned subsidiary of Airport Holdings Ltd., which is controlled by the government (51% of shares) and the Mauritius Investment Corporation (49% of shares). The BOM is a public body created by statute (Bank of Mauritius Act, 2004) with a board of management appointed by the government. They all have a duty to be transparent about their operations, financial results and executive compensation by making timely disclosures.

If we had a Freedom of Information Act (FOIA), any citizen could have requested information on executive compensation in those public enterprises or institutions. Since those public entities publish their annual reports very late, it’s up to the government to be proactive in transparency and disclose the relevant information on executive compensation.

The electorate voted overwhelmingly for a change from the bad governance of the last ten years, characterized by shady management practices. To be able to do bold and meaningful reforms, the government should lead with confidence-building steps based on information sharing and voluntary disclosure. Opacity is not the way to go. The concept of “open-data government”, supported by a FOIA, is the new norm in advanced parliamentary democracies.

Mauritius Times ePaper Friday 1 August 2025