Public enterprise execs ‘earn too much’

2012-08-13 12:08

South African business owners believe executives of large public enterprises earn too much money, a new survey has found.

About 68% of South African business owners believed executives were paid too highly. Seventy-six percent of their international counterparts share this view, the researchers said.

The study, by Grant Thornton’s International Business Report, was released today.

Head of corporate finance Jeanette Hern said in South Africa 90% of respondents believed the positions of chief executive and chairperson should not be held by the same person.

In Brazil, Russia, India, and China, 88% of those surveyed felt these roles should be separated, compared with 80% globally.

About 85% of South Africans said shareholders should be consulted about remuneration policies for senior executives.

This was well ahead of the global response of 67%.

The results indicated the tough global economic conditions of recent years had affected investors, Hern said.

“They want to know how their money is being spent and whether executives’ remuneration is in line with performance.”

This hypothesis was supported by the fact that all Greek business owners surveyed since the country’s economic collapse, believed remuneration should be tied to performance.

Only 4% of South African business leaders differed from this view.

“These businesses need to ensure that their policies are known, understood, and transparent, and that reward can be justified by performance,” Hern said.

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