CEO vs worker pay in South Africa – Woolworths, Shoprite, Mr Price and more

The average lowest-paid worker in the wholesale and retail sector would need to work for 21 months to earn what the average CEO in the sector earns in a single day.

This is according to new research by Just Share, which examined ten JSE-listed companies in the wholesale and retail space using recent public disclosures.

Shoprite Holdings, Pick n Pay, Pepkor Holdings, The Foschini Group, Woolworths, Mr Price Group, Dis-Chem, Clicks Group, Truworths International, and Spar Group employ 389,766 full-time employees and account for R833.7 billion in yearly revenue.

The wholesale and retail sector is South Africa’s second-largest employer after the government, accounting for 17% of the country’s workforce.

Although the CEOs of these companies earn millions, the lowest-earning employee earns far less.

The average unweighted ratio between the total CEO remuneration and the total lowest earner’s remuneration is 597.

This means that the average CEO retail and wholesale CEO earns 597 more than the lowest-earning employee.

Despite offering the highest internal minimum wage, the retailer with the highest vertical pay gap is Woolworths.

Woolworths CEO Roy Bagattini earned R122 million for the 2023 financial year—far more than the R93,600 internal minimum pay. This creates a vertical pay gap of 1,308 years.

Shoprite is the second worst offender, with its CEO Pieter Engelbrecht earning R64.6 million, while the internal minimum wage is R65,263. This creates a vertical pay gap of 991.

Mr Price CEO Mark Blair earned R45 million, while the average internal pay was R64,537, creating a vertical pay gap of 711.

The best performer was Pick n Pay, where CEO Sean Summers’s pay of R10 million was 155 times more than that of the lowest-paid employee.

“While the sector undoubtedly plays an important role in employing to low- and semi-skilled workers,” said Just Share’s senior inequality analyst Kwanele Ngogela.

“It is nevertheless crucial to also recognise the contribution of the extreme vertical wage gaps which characterise these companies to the country’s overall high levels of inequality.”

It is important to note that CEO remuneration also extends beyond guaranteed pay, with short-term incentives (STIs), long-term incentives (LTIs), and other benefits making up a significant portion of CEO
remuneration.

For instance, 60% of Baggatini’s pay was linked to LTIs.

Legal changes

The Companies Amendment Act was recently signed into law by President Cyril Ramaphosa and is expected to be proclaimed soon. The new system will make the vertical pay gap disclosures mandatory for public and state-owned companies.

Relevant companies will need to share the following

• The total remuneration received by each director and prescribed officer in the company;

• The total remuneration of the employees with the highest and lowest total remuneration;

• The average total remuneration of all employees, median remuneration of all employees; and the remuneration gap reflecting the ratio between the total remuneration of the top 5% highest paid employees and the total remuneration of the bottom 5% of the lowest paid employees.

Read: South Africa’s millionaire life insurance bosses – earning up to R32 million