(John McCann)
CEOs at South Africa’s largest JSE-listed companies earned total remuneration packages of R24.9-million on average last year, according to a new report by PwC.
“The average pay for CEOs is R24.9-million. For CFOs (Chief Financial Officers) the average is R15.1-million and for executive directors R8.7-million,” states PwC’s 10th edition of Executive directors: Practices and remuneration trends.
The report looks at remuneration trends, gender balances and pay reporting requirements at SA companies for 2017.
The R24.9-million refers to “total guaranteed packages” for the heads of the top 10 listed companies on the JSE, which the report noted accounted for 60% of the market capital invested, totalling R8.7-trillion.
For the top 10 CEOs this was 1.3% up on the figure of R24.6-million in 2016. Average pay for the top 10 CFOs rose almost 10%, while average pay for the top 10 executive directors rose 12.8% compared to 2016.
Remuneration for the 342 CEOs of companies listed on the JSE varied considerably. Median CEO “total package” remuneration at JSE-listed groups was R5.2-million.
The remuneration package for a CEO at a medium cap JSE-listed company in the industrials sector ranged between R5.7-million and R7.4-million.
A Chief Financial Officer at a small capitalisation JSE-listed company in the services sector could expect to earn between R1.7-million and R3-million.
The report did not name companies.
Gender representation
The report found that only 2.2% of the CEOs at JSE-listed companies were women.
This number increases to about 10% when the CEOs of all SA companies are included, including those not listed on the local bourse.
Meanwhile, the percentage of women in leadership roles at SA companies has been flat, increasing only slightly from 26% in 2004 to 28% in 2017.
In a media release to coincide with the report, PwC said it was not yet clear how the recent exposure of financial misconduct at some major SA companies would affect executive pay.
Shares in global retail chain Steinhoff, for example, have fallen by over 95% since December, when its CEO Markus Jooste abruptly resigned after accounting irregularities were flagged in its financial statements.
VBS Mutual Bank, meanwhile, was placed under curatorship in March.
“The question that must be answered is what effect a breach of fiduciary duties or misconduct will have on the remuneration of executives, and whether companies should claw back incentives paid to or vested in culpable executives in the event of a corporate failure,” it said.
“In light of the current climate and recent corporate failures, companies need to look at whether they have the appropriate measures in place to hold executives to account if the need arises, and if necessary recover their variable pay.” — Fin 24