The truth about CEO pay in South Africa

 ·5 Dec 2016

Recent data from Bloomberg showed that South African CEOs are some of the highest paid in the world – however new local data shows that the numbers may be overblown.

Analysis done by Bloomberg in November showed that South African CEOs were ranked as the 7th best-paid executives in the world, with an average salary of R102 million.

This high value raised eyebrows with local remuneration companies, who questioned how the number was reached.

It was determined that two factors were at play – first, executives who earn in foreign currency skewed the data, and second, CEO share holdings were taken into account, which is not a fair reflection of the market.

R100 million salaries for locally based executives are rare, even with added bonuses and shares attached to the deal.

According to the latest salary survey data released by remuneration experts, 21st Century Consultants, while still many times greater then the average employee, South African CEO salaries are far more muted than Bloomberg suggests.

The group’s 21st Century Executive Pay Barometer for 2016 reveals the median salaries for CEOs, CFOs and executive directors in South Africa:

Median Salaries for SA executives, 2016

Executive Small Cap Medium Cap Large Cap
CEO R2 531 000 R3 044 000 R5 745 000
CFO R1 560 000 R1 953 000 R3 436 000
Executive Director R1 693 500 R2 170 000 R3 654 000

Excluding CEOs that earn in foreign currency

According to 21st Century, over the past year, CFOs have received the highest median salary increase of 8%, with CEOs following closely with a median of 7.6% and executive directors with a median increase of 7%.

“All three of these medians are in excess of the median for general staff employees according to 21st Century’s increase report,” the group said.

The Bloomberg report showed that the average South African CEO had an average salary around 500 times greater than the average employee – however 21st Century’s data showed that the earnings gap is far smaller – from around 9 times greater for CEOs at smallcap companies, 11 times at mid-cap companies, to 20 times at large cap companies.

This is how wage gaps differ across company size and industry:


The group also noted that much of CEOs final pay is made up of long and short-term incentives, reaching as high as 165% for CEOs at large companies.

Other CEO salary data

21st Century’s data is more in line with previous data and research into executive pay in South Africa.

Research published earlier in the year found that the average salary for a CEO of listed company in South Africa was R5.3 million – shooting up to R9 million when bonuses and incentives are included.

For other executives, the average basic salary was R4 million, jumping to R7 million with short and long-term incentives included.

Executives who earn in local currency were paid less, overall, with an average of R3.4 million (R5.7 million including incentives), versus those earning in other currencies, which averaged a basic salary of R7.8 million (R16 million with incentives).

Research conducted by PwC on executive pay found that the average salary among CEOs ranges between R3.06 million and R7.14 million.

Read: How much money the “average Joe” CEO earns in South Africa

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