Chief executives of South African companies are paid 35 to 53 times more than average workers, according to a report released by trade union Solidarity on Wednesday.
The report, which has been six months in the making, showed trends in the remuneration of top management of companies listed on the JSE, the union added.
Solidarity’s economist Lullu Krugel said that there was understanding of the fact that the pay of company chief executives should be commensurate with their positions.
“When is enough enough?” she asked.
It is to be expected that the portion of a chief executive’s remuneration, related to the company’s performance, will be adjusted according to the performance, but that increase in basic salary should be linked to inflation, as it is when it comes to workers, Krugel said.
“What the study shows, however, is that the chief executives of companies received an average salary increase of 18,3% last year, and that their total remuneration went up by 44,19%. Figures published by Statistics South Africa in its Quarterly Employment Survey show that the total remuneration of the average workers went up by 5,24% between March last year and March this year,” she added.
The study used various methods to calculate the total remuneration of chief executives, and showed that the chief executives of JSE-listed companies were paid between R3,351-million and R4,569-million in the previous financial year, or between 35 and 53 times more than the average worker, according to Solidarity.
Chief executives could also exercise between R23,746-million and R34,847-million each in share options, the union added.
These values excluded current shareholding by chief executives in companies under their management, Solidarity said.
The study also looked at trends in different sectors and found that chief executives in the retail sector earned on average 223 times more than the average workers, the union added.
Krugel said that 18% of chief executives received an increase in their remuneration, despite the companies under their control having shown declining profits.
Eleven percent of chief executives also received increased bonuses, despite a decline in the performance of their companies, Solidarity said. — I-Net Bridge