MultiChoice has dismissed industry speculation that it is considering moving its headquarters to Dubai, where many of its top management now reside and work.
These rumours gained momentum after MultiChoice CEO Calvo Mawela joined the company’s chairman Imtiaz Patel in their Dubai office.
Other top MultiChoice executives who are based in Dubai include Yolisa Phahle (CEO of general entertainment and connected video) and Brand De Villiers (MultiChoice Africa CEO).
This means many executive management decisions for the MultiChoice Group are now made in Dubai rather than its traditional headquarters in Randburg.
What makes the decision to have its top executives in Dubai curious is that it costs the company millions extra in remuneration.
The MultiChoice executives working and living in Dubai receive higher average salaries and lavish perks, including a housing allowance, fees for schools, and a lot more.
Mawela’s base salary, for example, increased from $371,000 to $571,000 following his move to Dubai. His company benefits showed an even bigger jump – up from $46,000 to $227,000.
Including short and medium-term incentives, Mawela’s total pay package increased from $708,000 to $1,591,000 in a year – a jump of 125%.
The higher pay packages and additional benefits are great news for the MultiChoice executives working in Dubai, especially since they do not have to pay any income tax.
It is, however, costing MultiChoice millions more in salaries and perks, which raises the question of why it would support this move.
Dubai’s tax regime may explain it. Dubai has no corporate tax, which means with the right structure MultiChoice can potentially save billions in future taxes.
In its latest annual report, MultiChoice highlighted that it made a total tax contribution of R12 billion over the last year.
As one of the largest taxpayers in Africa, Dubai offers MultiChoice and its executives a very attractive tax haven. Click here for more details.