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Johannesburg - The total remuneration paid to executive directors of companies listed on the JSE has increased, although the rise is generally smaller than in previous years.
"This has done little to narrow the executive pay gap which remains a serious and controversial issue," consultancy PricewaterhouseCoopers (PwC) said in a statement on Tuesday.
South Africa had not seen the pay freezes imposed elsewhere in the world, particularly in the UK, and the local financial services sector had not experienced the restraints and cutbacks evident in this sector globally.
"Our research shows that, in the last year, the total annual remuneration (including base pay, benefits and performance bonus) paid to SA executive directors in the financial services sector increased by 7%," PwC South African human resources director Gerald Seegers said.
While this was much smaller than in 2008 (23%), it was still an increase.
By way of comparison, base salary increases awarded to executives of FTSE 100 companies over a similar period were limited to about 1%, and the median bonus payment made to FTSE 100 company executives was 0% of salary.
"It is also interesting to note that performance bonuses paid by large and small cap JSE-listed companies in 2009 have fallen - for example, the median performance bonus paid to executive directors of the large caps fell from R2.9m to R2.4m."
The small cap bonus median fell from R1.76m to R974 000.
"This appears to reflect the difficult economic conditions that many SA companies have faced over the last year."
However, in the industrial sector the economic downturn was not always reflected in the extent of executive remuneration reduction. Some companies, especially the mid and small cap industrials, and also the mid cap financial services companies, had reported higher packages notwithstanding the downturn, Seeger added.
According to PwC, large cap companies saw yearly aggregate increases in guaranteed packages of 4% (2009), 31% (2008) and 14% (2007).
The median guaranteed package (base pay and benefits) for an executive director of a large cap company was now R3.9m. In 2009, these companies reduced their overall performance bonuses by 18% (after prior year increases of 4% in 2008 and 43% in 2007), with the median performance bonus of a large cap company executive director now at R2.4m, falling from R2.9m in 2008.
Aggregate increases in guaranteed packages for medium cap companies reflected a steady increase of 12% (2009), 12% (2008) and 10% (2007).
In this size of company, the median guaranteed package was R2.6m, with the median performance bonus at R1.5m.
Conversely, small cap companies showed a marginal tail-off in aggregate increases in guaranteed packages of 12% (2009), 13% (2008) and 19% (2007).
The average median guaranteed package for a small cap executive director was now R2m.
In 2009, performance bonuses paid in aggregate to executive directors of small cap companies reflected a trend more conducive to economic conditions of the time, with a 2009 decline to a median bonus of R974 000, from R1.7m.
- Sapa
"This has done little to narrow the executive pay gap which remains a serious and controversial issue," consultancy PricewaterhouseCoopers (PwC) said in a statement on Tuesday.
South Africa had not seen the pay freezes imposed elsewhere in the world, particularly in the UK, and the local financial services sector had not experienced the restraints and cutbacks evident in this sector globally.
"Our research shows that, in the last year, the total annual remuneration (including base pay, benefits and performance bonus) paid to SA executive directors in the financial services sector increased by 7%," PwC South African human resources director Gerald Seegers said.
While this was much smaller than in 2008 (23%), it was still an increase.
By way of comparison, base salary increases awarded to executives of FTSE 100 companies over a similar period were limited to about 1%, and the median bonus payment made to FTSE 100 company executives was 0% of salary.
"It is also interesting to note that performance bonuses paid by large and small cap JSE-listed companies in 2009 have fallen - for example, the median performance bonus paid to executive directors of the large caps fell from R2.9m to R2.4m."
The small cap bonus median fell from R1.76m to R974 000.
"This appears to reflect the difficult economic conditions that many SA companies have faced over the last year."
However, in the industrial sector the economic downturn was not always reflected in the extent of executive remuneration reduction. Some companies, especially the mid and small cap industrials, and also the mid cap financial services companies, had reported higher packages notwithstanding the downturn, Seeger added.
According to PwC, large cap companies saw yearly aggregate increases in guaranteed packages of 4% (2009), 31% (2008) and 14% (2007).
The median guaranteed package (base pay and benefits) for an executive director of a large cap company was now R3.9m. In 2009, these companies reduced their overall performance bonuses by 18% (after prior year increases of 4% in 2008 and 43% in 2007), with the median performance bonus of a large cap company executive director now at R2.4m, falling from R2.9m in 2008.
Aggregate increases in guaranteed packages for medium cap companies reflected a steady increase of 12% (2009), 12% (2008) and 10% (2007).
In this size of company, the median guaranteed package was R2.6m, with the median performance bonus at R1.5m.
Conversely, small cap companies showed a marginal tail-off in aggregate increases in guaranteed packages of 12% (2009), 13% (2008) and 19% (2007).
The average median guaranteed package for a small cap executive director was now R2m.
In 2009, performance bonuses paid in aggregate to executive directors of small cap companies reflected a trend more conducive to economic conditions of the time, with a 2009 decline to a median bonus of R974 000, from R1.7m.
- Sapa
