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JSE non-executive directors’ fees surge

Harare – About 346 top non-executive directors on the JSE are paid in foreign currency while the British exit from the European Union contributed to a decline in the number of executives paid in pound sterling, a report showed on Wednesday.  

The 'Non-executive directors: Practices and fees trends' report released by PwC on Wednesday highlighted that fees for board chairpersons have risen by 10% to R520 000 in 2016 compared to the previous year.

Gerald Seegers, the head of People and Organisation for PwC Africa, said there have been improvements in corporate governance matters in Africa over the last 10 years.

However, some African countries are still grappling with issues such as non-disclosure and insider trading that have been reported in the past few years.

Other corporate governance issues cited include tax avoidance and evasion, with executives accused of using tax havens and offshore tax schemes.

READ: Oxfam: Tax-dodging helps these 8 rich men own half world’s wealth – Fair or foul?

“We have seen significant improvement on matters such as independence and the mix of quality of non-executives on our boards,” said Seegers.

The PwC report said of the 2 248 non-executive directors on the JSE, about 346 are paid in foreign currency.

It further notes “a decline in total fees paid in pound sterling to non-executives serving on South African boards (that) took place during the 2016 reporting period as a result of the Brexit” vote.

“The median chairperson fee across the entire JSE has risen by 10.2% to R520 000. The increase at median level for all non-executive directors serving on the boards of all companies on the JSE was 8.2%,” said the report.

Total fees to non-executive directors of large cap companies in the financial services sector rose by 13.1% to R978 000, it added.

In the resources sector, there was a marginal increase for both chairpersons and non-executive directors, with total fees paid to non-executive directors in the large cap basic resources sector increasing from R930 000 to R1.044m for the median level.

Companies in the industrial sector also showed marginal increases for both chairpersons and non-executive directors.

Although non-executive directors in other African countries such as Botswana, Ghana, Kenya, Namibia, Nigeria and Tanzania showed reasonable increases, the “impact of currency weaknesses against the US dollar” limited these increases.

“Overall, the total fee paid to chairpersons at median level for the seven selected sub-Saharan African exchanges is $45 000. Total fees paid to non-executive directors at the median level for the regional exchanges are $25 000,” PwC said in the report.

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