Banking salaries in South Africa

South African banking CEOs – some of the highest earners in the country – are taking home between 40 and 80 times more than their average employees.

Looking at South Africa’s five biggest retail banking groups – Barclay’s Africa, Standard Bank, FirstRand, Capitec and Nedbank – the average retail banking employee earns an average of R360,000 per year.

Meanwhile, across the groups, CEOs take an average of R2.1 million – almost 60 times as much as the average employee.

The bank that pays its staff the highest average salary is FirstRand which, with over 38,500 employees and staff costs of R20.7 billion (including salaries, bonuses, training and other benefits), pays an average of R536,000 per employee.

Standard Bank – recently listed as South Africa’s biggest company – pays employees an average of R507,000 a year, the second highest amount in the sector.

Standard Bank has almost 50,000 employees, and in the 2014 financial year spent R25 billion on staff costs.

Highest average salaries

Nedbank CEO, Mike Brown, was the top earner among banking execs in 2014, taking home a salary of R35 million for the year.

This is 77 times greater than the average employee earns at the bank, which sits at R453,720 for its 30,500 employees.

FirstRand CEO, Sizwe Nxasana, took home a salary of R29.5 million for the year – 55 times larger than the average employee, ranking third after Absa, which has a pay gap of 58 times.

Standard Bank has the lowest pay gap, after its joint CEOs, Ben Kruger and Sim Tshabalala, took a pay knock in the last financial year.

In 2014, Standard Bank suffered from a sub-par performance in its London operations, which saw flat growth in earnings for the financial year.

The pay gap between Tshabalala and Kruger and the average employee is 48x and 37x, respectively.

Bank No. of employees Salary spend Average
FirstRand 38 542 R20.7 billion R536 324
Standard Bank 49 259 R25.0 billion R507 521
Nedbank 30 499 R13.8 billion R453 720
Absa 43 765 R19.3 billion R440 922
Capitec 10 261 R2.1 billion R204 658

Pay gaps

Bank Employee Average CEO pay Gap (times greater)
Nedbank R453 720 R35.1 million 77
Absa R440 922 R28.6 million 58
FirstRand R536 324 R29.49 million 55
Capitec R204 658 R10.3 million 50
Standard Bank R507 521 R24.3 million 48
Standard Bank R507 521 R19.0 million 37

CEO pay as % of salary spend

According to research conducted by Mergence Investment in 2014, South Africa sits with the 5th highest average pay gap in the world, after the USA (1st), Hong Kong (2nd), Germany (3rd), and the UK (4th).

The group noted that, given the size and scale of the companies on the JSE, “the amounts that are paid to executives are small relative to the total salary bill of the company and to the operating expenses of the company”.

“This incentivises corporate boards and shareholders to spend to obtain the best management teams.”

In context of the SA banking sector, executive salaries as a percentage of total salary spend is relatively small, not exceeding 0.5% of total salary spend.

Company CEO pay Salary spend % of spend
Capitec R10.3 million R2.1 billion 0.49%
Nedbank R35.1 million R13.8 billion 0.25%
FirstRand R29.49 million R20.7 billion 0.14%
Absa R28.6 million R19.3 billion 0.13%
Standard Bank R24.3 million R25.0 billion 0.10%
Standard Bank R19.0 million R25.6 billion 0.08%

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Banking salaries in South Africa