The latest PwC Executive Directors Report provides an in-depth analysis of pay trends for chief executive officers, chief financial officers and executive directors in South Africa.
Executive pay has drawn wide criticism and calls for further scrutiny in South Africa, but the debate is the same globally.
As part of its research, PwC also looked at how executives were paid at some of the top companies in the world, specifically those trading on the FTSE 100 Index.
The FTSE 100 (Financial Times Stock Exchange 100 Index) is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation.
PwC tracked the pay of executives at the top of these companies, looking specifically at basic pay and stated benefits, making it comparable to the total guaranteed packages covered locally.
According to PwC, South Africa’s top CEOs – from the 10 biggest companies listed on the JSE – averages just under R24 million.
For the FTSE 100 companies, the average CEO is paid $1.78 million – or R24.9 million at current rates – putting South Africa’s top CEOs on pretty equal footing.
Across different industries, the picture changes with industry specific CEOs on the FTSE 100 getting paid a lot more than local executives.
The reason for this is likely down to purchasing power, which is not factored into a direct conversion. Using purchasing power parity figures (World Bank) the salaries are more in-line with local pay levels.
However, accounting for purchasing power parity also makes the JSE top 10 CEOs appear to be earning double what their FTSE counterparts get paid.
A caveat to this data is that it’s an average of the top 10 companies compared to an average of 100. A comparison looking at the top 10 companies on the FTSE would likely yield a very different result.
The table below outlines the average salaries of CEOs, CFOs and EDs at the top 10 JSE-listed companies compared to their counterparts on the FTSE 100 – with a direct conversion and purchasing power conversion.
The table below outlines the average salary for large cap CEOs at JSE listed companies compared to their FTSE 100 counterparts – with a direct conversion and purchasing power conversion.