R60 for every R1 the average employee makes – what South Africa’s top 200 CEOs earn

The average CEO among South Africa’s top 200 companies earned an estimated R19.7 million for the 2024 financial year, compared to the average formally employed worker’s R329,400—but there’s more to it than just the numbers.

According to the PwC 2024 Directors’ Remuneration and Trends Report, the median total guaranteed pay (TGP) for CEOs of the top 200 JSE-listed companies stood at R8 million per annum.

This, combined with other forms of compensation such as short-term incentives (STI) and long-term incentives (LTI), brought the total median remuneration package to R19.71 million per year.

However, the real impact of such figures becomes evident when compared to the average formal sector worker’s earnings.

The average non-agricultural employee in South Africa earned R27,450 per month (or R329,400 per annum) in the second quarter of 2024, according to Stats SA data.

This disparity means that CEOs of the top 200 JSE companies earn nearly double in a single day what the average employee makes in an entire month.

In other words, for every R1 earned by a typical formal sector worker, the average CEO in South Africa’s elite ranks takes home R60.

The gap between the highest-paid executives and everyday workers is vast, and it continues to fuel public debates around fair compensation in a country with significant economic inequality.

Yet, the responsibilities of a CEO in South Africa’s volatile business climate must not be understated. CEOs in South Africa face a range of significant challenges.

The country’s macroeconomic environment has been fraught with difficulties such as low GDP growth, high inflation, energy supply issues, and socio-political unrest.

In this climate, CEOs must drive organisational performance while balancing the interests of shareholders, managing teams, ensuring regulatory compliance, and addressing increasingly vocal calls for environmental, social, and governance (ESG) leadership.

Additionally, a global pandemic and its economic fallout have added further complexity to the role, requiring CEOs to steer companies through crises while ensuring business continuity.

Despite the pay gap, it’s essential to understand that CEO roles in South Africa are exceptionally high-stakes.

Their performance is measured not only by financial metrics but also by their ability to navigate an array of external challenges, including labour relations in a country where unemployment and worker rights are crucial issues.

Many companies have moved to link CEO pay more closely to company performance, with short-term incentives and long-term incentives forming significant portions of executive compensation packages​.

Nevertheless, as South African households continue to face economic pressures, the pay gap between CEOs and average workers remains a contentious issue.

According to the Bureau for Economic Research (BER) Survey of Inflation Expectations for 2024, wages are expected to grow by 4.9%, while inflation is projected to average between 4.9% and 5.3%, meaning that many South Africans will experience zero or negative real wage growth.

This will perpetuate the strain on household budgets, with real wage growth expected to improve only marginally in 2025.

In August, Shannon Bold, a senior economist at the BER, highlighted that households are increasingly relying on debt to cover daily expenses, raising concerns about financial vulnerability​.

In this context, the widening pay disparity between CEOs and the average worker becomes more pronounced, making it a focal point for broader discussions about income inequality and wage fairness.

On Friday (26 July), President Cyril Ramaphosa signed amendments to the Companies Act of 2008 into law that promote the ease of doing business and impose greater corporate transparency.

The new legislation aims to increase corporate transparency by requiring public and state-owned companies to disclose the pay gap between their highest- and lowest-paid workers.

Companies must report the earnings gap between the total pay of the top 5% of highest-paid employees and the total pay of the bottom 5% of lowest-paid workers, which some say will have a positive impact, while others have flagged some major risks.

Whether disclosed or not, while CEO remuneration at South Africa’s top companies may seem disproportionately high compared to the average worker’s salary, it reflects the considerable expertise and pressures associated with these roles.

As South Africa continues to grapple with economic challenges, debates around executive compensation are likely to intensify, especially as the broader public faces financial hardships.

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