CEO vs lowest-paid worker salaries in South Africa

 ·26 Jun 2023

Several of South Africa’s largest publically-listed companies have major pay discrepancies between their highest- and lowest-paid employees.

According to Just Share, wage gap disclosure in South Africa is not required by law, but several companies nationwide have started to release this information.

“A common argument against pay gap disclosure in South Africa is that this disclosure will be ‘taken out of context’ or ‘misinterpreted’,” Just Share said.

“While there are important differences between sectors which impact levels of pay, Just Share believes that stakeholders can make their own assessments of fairness on a case-by-case basis and that this disclosure is a crucial first step in understanding and addressing the high labour market inequality that is so damaging to our economy and society.”

According to the data, Shoprite’s CEO Pieter Engelbrecht is the highest-paid CEO, with a single-figure remuneration of R63,458,000.

However, Shoprite’s own internal minimum wage is the lowest on the list, coming at R58,700 – if the employee works 45 hours per week for all 52 weeks of the year.

This means that Shoprite’s Pay Ratio is over 1,000, which is double that of second-place Woolworths.

The JSE sees the smallest disparity between the highest and lowest-paid employees, with its CEO, Leila Fourie having the lowest pay – just over R20,000,000, whilst also having the highest internal minimum salary of over R400,000.

“None of these companies explicitly states what the lowest grade job is that attracts its disclosed minimum salary. For Woolworths and Shoprite, the hourly base pay presumably applies to those working in these companies’ retail outlets,” Just Share said.

“It is not obvious in other sectors, however, what the lowest grade job is, which means that it is unclear whether these minimum packages apply to unskilled workers.”

Below are the vertical pay gaps across several listed companies in South Africa:

JSE-listed companyCEO single-figure remunerationDisclosed internal minimum pay Pay ratio (multiple)
ShopriteR63 458 000R58 7001 081
WoolworthsR36 133 000R85 500423
Standard BankR55 694 000R215 700258
AbsaR46 058 000R200 000230
NedbankR33 466 000R190 000176
InvestecR43 909 000159.1*
Old MutualR22 078 000R180 000123
JSER20 668 000 R419 58549
*Investec only reports across 25th, 50th and 75th percentiles for its vertical wage gaps, and does not include a minimum yearly pay package.

Just Share noted that many companies use guaranteed pay rather than total remuneration for their CEOs to calculate pay ratios, which obscures the fact that large amounts of CEO pay are based on short- and long-term incentives.

Thus, Just Share said that it was encouraging that Old Mutual, Investec, and Nedbank use total remuneration instead of guaranteed pay in their wage gap analysis.

Moreover, the 2016 King IV Report on Corporate Governance recommended that remuneration policy should include provisions that ensure that executive management remuneration is fair in the context of how much other employees are paid.

“Most listed companies make assertions about the fairness of executive remuneration without substantiating their claims through pay gap disclosures or any other relevant evidence (e.g., disclosing internal minimum wages or the lowest grade guaranteed to pay for comparative purposes),” Just Share said.

“Furthermore, when assessing the “fairness” of their lowest wages, most companies compare these wages to the statutory national minimum wage (wage floor) rather than to the fairness of overall remuneration within the organisation, as required by King IV, or to a living wage.”

Just Share said that this is because, by law, South African companies are not required to disclose wage gaps, despite the Companies Amendment Bill possibly requiring such disclosures in the future.

However, the finalisation of the Bill has been delayed due to corporate lobbying.

Read: Meet the South African bosses who earn over R240,000 a day

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