Top 10 JSE CEOs take home average R24.6m

Johannesburg – CEOs of the top 10 JSE listed companies take home an average pay of R24.6m, a report by PricewaterhouseCoopers (PwC) revealed.

PwC released the ninth edition of its Executive Directors’ Remuneration and Practices report on Thursday. The report reviewed the total guaranteed package (TGP) for executives paid during 2016.

Globally, despite increasing calls to reform executive remuneration, the gap between executive pay and the average employee is still widening. “Executive pay has come under intense scrutiny around the world, with many critics arguing for more stringent regulations citing the weak link between pay and performance, and the need for more transparency in the pay determination process,” said Gerald Seegers, head of people and organisation for PwC Africa.

As a result some countries have considered regulating executive remuneration for companies in certain sectors. In South Africa, remuneration packages of executives in insurance companies are aligned to the company’s risk horizon, the report explained.

Among the main findings of the report show that the average increase paid to junior workers for 2016 was 16%, compared to 5.7% for executives.

Chief executive officers of the top 10 JSE-listed companies walked away with an average pay of R24.6m, and that of chief financial officers was R13.8m. Executive directors of these companies earned R7.7m. These top 10 companies account for 60% (R8.4trn) of the JSE’s market capitalisation.

The median pay of chief executives on the JSE’s AltX is at R2.1m, while the median executive pay for all JSE executives was R3.906m, compared to R3.694m reported in 2015.

Additionally, the report reviewed executive pay across sectors. The median pay for chief executives of large-cap basic resources companies is R23m, and the median for executive directors is R16.3m.

The median pay of chief executives of large-cap companies in the financial services sector was at R7.4m, while that of executive directors was at R4.3m. The median pay of chief executives of large-cap industrial companies was at R15.2m, while that in services was at R8.1m.

Some directors are paid in foreign currency, and the amounts are converted to rands. The exchange rate volatility may sometimes increase or decrease the value of remuneration, the report noted. During 2016, 153 executive directors were paid in foreign currency.

Those paid in Australian dollar saw an appreciation of 7.6% between April 2016 and April 2017. Those paid in Euros saw a 10% increase over the same period. Those paid in British pounds saw an appreciation of 16.8% while those paid in US dollars had an appreciation of 5.9%.

Gender inequality

Gender inequality persists. In Africa only 5% of CEOs are women, the report said. Particularly in South Africa, there is only one female chief executive in the top 40 JSE-listed companies, the report indicated. Further, total guaranteed pay for women is lower than that of their male counterparts.

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