How much CEOs, CFOs and directors earn in South Africa

 ·10 Apr 2018

Remuneration specialists 21st Century has released its latest pay barometer for 2018, detailing how much money executives earn across South Africa’s JSE-listed companies.

Executive remuneration continues to remain under the spotlight in South Africa, however the barometer noted that it was not CEOs that saw the biggest increases last year,

CFOs received the highest median salary increase of 8% of TGP (Total Guaranteed Package), followed closely by CEOs with a median of 7.6% and Executive Directors which had 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.

Unsurprisingly, executives earn more depending on the size of the company, with CEOs at large cap businesses earning an average total guaranteed package of R5.25 million, while CEOs at small cap companies earn an average of R2.77 million.

Similarly, executive directors can expect to earn R3.5 million at large cap companies, while those at small cap companies can expect to earn an average of R1.8 million.

Total Guaranteed Package by company size

Position Small cap Medium cap Large cap
CEO R2 772 000 R3 215 500 R5 250 000
CFO R1 800 500  R2 160 000 R3 541 000
Executive director R1 805 500 R2 234 000 R3 516 000


While TGP is an important part of executive remuneration, it is only one piece of the three-piece puzzle that makes up executive remuneration, said 21st Century.

“Variable pay is a significant part of an executive’s pay structure and consists of short term incentives (STI) and long term incentives (LTI),” it said.

“Short term incentives are typically made up of cash pay outs for reaching short term goals (usually less than one year) whereas long term incentives are commonly paid out in the form of equity in the business for long term performance (usually 3 years or more).

“As a result, the valuation of unvested LTIs has been a point of contention which has been fiercely debated in many circles. Unvested LTIs are the equity held by a participant that has not reached the date of maturity for payment,” it said.

21st Century found that CEOs receive the largest percentage of STIs and LTIs at each company size.

This is compounded by the fact that CEOs also received the highest median TGP at each company size – a larger % on a larger guaranteed pay.

CFOs and Executive Directors are comparable in terms of their median percentage of STIs and LTIs, although generally CFOs receive a larger percentage of variable pay than Executive Directors.

This results in CFOs having larger median total earnings compared to Executive Directors, even though Executive Directors had a marginally higher median TGP at each company size.

The graph below shows the mix of annualised STI and LTI payments as a percentage of TGP – the annualised figure is calculated as the portion of variable pay that will be paid out annually if all performance conditions are met.


As part of its analysis, 21 Century also noted that the mix of vehicles used for compiling a LTI requires analysis – as the conditions attached to an LTI scheme can significantly affect the value of these shares.

‘Full shares’ place the full value of the share in the hands of the recipient and can be sold at full face value at the time of sale.

In comparison, ‘Appreciation shares’ are given to the holder at a particular strike price (deemed value at point of award) and the holder is only entitled to the difference between the strike price and face value at the time of sale.

The chief difference between these two types of shares is that full shares still have value even if the price of the share declines whereas appreciation shares only have value if the share price is above the strike price, said 21st Century.

“A rule of thumb at present market conditions is that 3 appreciation shares approximately equal one full share in value at vesting.”

“The dominant form of shares awarded to executives at each company size is appreciation shares (even if the vested value is taken into account).

“Large companies have the highest prevalence of awarding full shares to their executives – which coincides with the higher percentages of LTIs given to each kind of executive in large companies,” it said.

The Share mix can exceed 100% as some executives receive both kinds of shares.

Position Small cap Medium cap Large cap
CEO 13% full share vs 88% appreciation share 11% full share vs 95% appreciation share 42% full share vs 77% appreciation share
CFO  27% full share vs 89% appreciation share  23% full share vs 86% appreciation share 46% full share  vs 77% appreciation share
Executive director 9% full share vs 91% appreciation share 33% full share vs 75%  appreciation share 36% full share vs 86%  appreciation share

Read: How much money South Africa’s billionaires earn every day

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