Publications
- Woolworths wants to "invest" an additional R120 million to hike its base pay to store workers from R33.40 an hour to R41.25 by 2023.
- Currently, the minimum wage in South Africa is R21.69 per hour, and the minimum wage in the retail sector is R28.25.
- Woolworths has previously received harsh criticism for its remuneration of executives.
Woolworths wants to increase its hourly minimum wage paid to store employees by almost 24% in the next two years.
It will "invest" an additional R120 million to hike its base pay to store workers from R33.40 an hour to R41.25 by 2023, the company said in its annual report, which was released on Thursday.
Currently, the minimum wage in South Africa is R21.69 per hour, and the minimum wage in the retail sector is R28.25.
More than 20 000 store staff will benefit from the planned increase, which Woolworths believes will go a long way towards its aspirations to pay a "just wage".
In its annual report, the company said there’s a "critical need to close the remuneration gap in the context of the socio-economic environment in South Africa".
Woolworths has received harsh criticism for its remuneration of executives, in particular of its previous CEO Ian Moir, who embarked on the disastrous takeover of the David Jones chain in Australia – but still received R77 million on his departure.
Last year, Woolworths shareholders revolted: investors who represent almost 80% of shareholding in the company voted against implementing the company’s remuneration plan. The vote is non-binding, meaning Woolworths only need to consult with shareholders about their concerns; it can still pay out the remuneration.
Zarina Bassa, chair of the Woolworths remuneration committee, said the results of the vote were "disappointing".
"We understand [shareholder] concerns and believe that they largely related to the exit package of the outgoing CEO (circumstances which are not anticipated to be repeated), the request for further disclosure of performance measures attributable to the sign-on [restricted share-plan] award made to [incoming CEO] Roy Bagattini, and details of the inclusion of a strategic component in the Corporate [short-term incentive] bonus scheme."
For the past year, Bagattini earned a cool R33 million, including a performance bonus of more than R15 million. On average, this meant monthly earnings of almost R2.8 million. At the current minimum Woolworths wage rate, store employees who work 45 hours a week would earn around R6 000 per month.
Zyda Rylands, who recently stepped down as Woolworths South Africa’s CEO, received more than R24.6 million.
Bagattini and Rylands, along with other executive directors and all other managers in the group, did not receive an increase in their guaranteed pay over the past year, while frontline store staff received a 4% increase in South Africa and a 1.6% increase in Australia.
But the remuneration committee has approved a 4.5% increase for executive directors for the 2022 financial year.
