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(Most) SA executive directors not overpaid

Pay gap ratio research shows remuneration packages compare favourably with international benchmarks.

Moneyweb is publishing the first update of our new Executive remuneration tool, which now includes detailed information about long-term incentives that executive directors of JSE-listed companies received in their last financial year, in addition to their other forms of remuneration.

The research is aimed at providing a ballpark comparison of the pay gaps that exist between the remuneration of South Africa’s leading companies and their rank and file employees.

The research was conducted by Moneyweb and Profile Media and includes detailed analyses of the annual reports of 329 listed companies and nearly 734 executive directors.

These packages are then compared with the average salaries of employees in the respective sectors as indicated by Statistics SA’s Quarterly Employment Survey (QES) for the second quarter of 2015.

(Read here for the full methodology of the research.)

Remuneration levels compare favourably with international trends

The latest research found that the average difference in guaranteed annual remuneration between executive directors and their rank and file employees is around 21 times. If a discretionary short-term incentive or bonus is added to the guaranteed package, the ratio jumps to 36 times. 

These ratios compare favourably with international trends, where ratios of around 50 times are seen as being acceptable. Although the averages of all executive directors are well below this benchmark, the average ratios of the most senior executives (CEOs, executive chairpersons and chief executives) are closer to the 50 times-ballpark. Their guaranteed salaries’ ratio is 35 times, but if their short-term bonuses are included, the ratio edges up to 47 times.

In fact, executives of JSE-listed companies earn relatively modest salaries compared with the US and the UK.

Research conducted by the Economic Policy Institute found that pay gap ratios in the US rose significantly in the past few decades. According to the research, the CEO-to-worker compensation ratio was 20 times in 1965. It rose to 30 times in 1978 and to 123 times in 1995. It peaked at 383 times in 2000, and was at 296 times in 2013.

The research think tank High Pay Centre also found that the CEOs of FTSE 100 companies earn around 150 times the salary of their average worker.

Although South Africa is one of the most unequal societies in the world, the inequality flows predominantly from the high level of employment. According to the QES, the average salary in South Africa’s formal sector is R206 499. If compared with the average salary of a rand-remunerated executive director of a JSE-listed company, the pay gap ratio is 17 times if short-term incentives are excluded, and 27 if they are included.

Long-term incentives

The most significant improvement to the latest research is the inclusion of long-term incentives in the data. This deferred income is not included in the calculation of the pay gap ratios, but is listed to show the extent of additional rewards executive directors earn on top of their normal guaranteed salary, benefits and their short-term incentives. 

It is important to note that only 216 of the 734 surveyed directors received long-term incentives. The average long-term incentive for those directors who received such a benefit is around R6.4 million.

Rand-remunerated executives earn less

A clear trend is that rand-remunerated directors earn a lot less than their (JSE-listed) counterparts paid in foreign currency. These executives are typically at the helm of large multinational companies such as BHP Billiton, SABMiller, Sasol, British American Tobacco, Anglo American and Investec and manage businesses with operations all over the world.

The average guaranteed salary for rand-paid executives is R3.4 million – which is less than half the R7.8 million their international peers pocket. The rand-remunerated directors received short-term bonuses of around R2.2 million, while their international colleagues earned about R8.3 million – an even more significant difference.

In total, locally-remunerated executives’ total packages are about a third of those paid in hard currency.

This trend is also visible with long-term incentives, although the average long-term incentive amounts to R6.4 million, as shown in the table. Those paid in rands average R4.3 million while those earning in pounds, dollars and euros averaged long-term incentives of a whopping R20.5 million.

It is also important to note that the pay gap ratios for executives remunerated in hard currencies are calculated on average salaries of rand-remunerated employees. Ideally, these ratios should be calculated based on the actual average salary of all the companies’ employees.

Amounts and ratios averages of all directors


  Guaranteed package Short-term incentive Long-term incentive Total annual based reward Ratio cum bonus Ratio ex bonus


R3 998 996

R2 994 010

R1 964 593

R6 993 006



ZAR remunerated

R3 441 163

R2 220 210

R1 258 186

R5 661 372



Non-ZAR remunerated

R7 802 941

R8 270 673

R6 392 358

R16 073 614



CEOs, CE and executive chairmen

R5 319 078

R3 645 221

R2 633 907

R8 964 299



CFOs and FDs

R3 250 747

R2 104 364

R1 258 827

R5 355 111



Other executive directors

R3 154 286

R3 049 320

R1 827 957

R6 203 606



Not all directors received short- and/or long-term incentives.


This research was prompted by the US Securities and Exchange Commission’s (SEC’s) introduction of a new pay gap ratio rule last year, which will compel US companies to disclose such pay gap ratios from next year. This debate is probably much more contentious in South Africa and this rule may quickly find its way into the listing requirements of the JSE.

This research aims to provide an indication of what pay gap ratios South Africans can expect to see when these rules are introduced in the local market.

Click here to use the executive remuneration search tool.

The JSE’s Top 15 earning executive directors are:

 Company  Name Role  Annual 
Investec Ltd. Hendrik du Toit Exec dir R86,302,050
Investec Ltd. Stephen Koseff CEO R71,213,860
Investec Ltd. Bernard Kantor MD R71,213,860
Investec plc Ian R Kantor Exec dir R71,209,020
Anglo American plc Mark Cutifani CEO R66,926,330
Investec Ltd. Glynn Robert Burger FD R64,099,950
British American Tobacco plc Nicandro Durante CE R59,721,640
Shoprite Holdings Ltd. J Welwood Basson CEO R50,092,000
SABMiller plc Alan Clark CEO & COO R47,176,940
Sasol Ltd. D Constable CEO R47,011,000
British American Tobacco plc Ben Stevens FD R46,551,980
Mondi Ltd. David A Hathorn CEO R44,878,160
BHP Billiton Plc Andrew Mackenzie CEO R41,802,000
Discovery Ltd. Neville S Koopowitz Exec dir R40,975,000
Datatec Ltd. Jens P Montanana CEO R37,272,930
Anglo American plc Rene Medori FD R36,778,040



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Executives internationally are overpaid. Why compare our execs payment to international payments? People can say what they want, these guys are definitely not worth their payment. The only reason they can get such a large sum of money is because the companies they work for is large, ( the companies can afford it), they managed to get into the company ( via good qualifications , maybe contacts, probably worked long hours which enabled them to know their business and of course a bit of luck) . However they could have entered a smaller company with the same work ethic, qualifications, competency and luck and would only earn a fraction. The size of the company therefore determines the salary, nothing else. The growing population enables larger companies which enables larger salaries. For this reason the increasing inequality.

I fully agree with you. These amounts they get are excessive and obscenely abusive to the staff in the companies.

Regardless of whether or not our CEO’s are over or under paid Juju will be on his high horse, and so will all the other communist, cadres in their fancy cars and smart cloths. Stop stoking this fire the have nots love to latch onto it.

This is a fire that needs stoking. Juju will be correct to go for the jugular. These payments are obscene and excessive in any terms you try to cover up.

In Reply to your article that: (Most) SA Executives Directors not overpaid!

Yarwell no fine, my views: According to a Barry Sergeant article in Noseweek 180

There are a CEO’s like Peter Gray of JCI around that did nothing when the theft of 5, 46 million stolen Randgold Resources shares sold to Investec Bank UK was uncovered in 2006 by Randgold’s forensic auditors. Any other CEO worth his salt would have hit Investec – and JCI – with spoliation orders.

Furthermore, Peter Gray, in return for years of conduct unbecoming, has been paid as a royalty:
• As Randgold CEO from August 2005 to July 2008 – he received a total of R10.7 million
• As CEO of JCI from August 2005 to March 2014 – he received R 44.4 million

JCI’s financial reporting should have been simple (except for a small farming operation at Boschendal – turnover R 10 million per year) as control was sold in August 2012, the following payments were made:

• Gray’s trusted FD – R24.2 million – for services for the five years ended March 31, 2012
• KPMG Audit fees – for the six years ended March 31, 2013 was an unbelievable R 45,2 million (according to the article KPMG forensic division’s front man for the JCI forensic investigation, Dean Friedman, was not a chartered accountant but a numerically illiterate lawyer – designed to defend their client JCI and mostly anyway, gobbledegook and schlock.

‘’If Gray’s career is a sample of what Investec’s Koseff means by South Africa having a ‘’reputation ‘’ as a top regulatory destination, then goodness knows what happens in a banana republic’’,

The Shifty Shades of Gray, in my view makes Nkandla looks like a ‘’Sunday school picnic’’ as billions were laundered!

I am still waiting and hoping that the FSB will say something!

What a desperate attempt to try convince us that inequality and greed at the top is appropriate. It started with Zuma, trying to convince us that our economic downward trend (largely due to his incompetence and greed) should not bother us, because his other incompetent counterparts in BRICS (i.e. Russia and Brazil) are similarly sinking their economies. And well, also because the world economy is also not in a better space. I guess the effect is trickling down. Big business execs are now trying to convince the working class to accept the peanuts they get, because its a “worldwide” trend for execs to get millions in bonuses, whilst the man on the ground gets below a minimum wage. Makes me wonder who sanctioned this research. And what purpose is it supposed to serve!!!

Spot on. I will support the workers when they next go on strike for a few peanuts in future.

Really!! Are we now going to justify why man on the ground should earn peanuts whilst the execs get hefty bonuses for the hardwork of the labourer?? Who sanctioned this research I wonder! Trickle down effect. Zuma tries hard to convince us that his undoing of our economy is okay, because his other incompetent counterparts in Russia and Brazil have also sank their economies. Greedy execs are now following suit. Are people supposed to feel good because getting a below minimum wage, to make way for execs to take home tens of millions, is also done elsewhere in the world. A pathetic and desperate attempt indeed!!

It must be these greedy execs who met Zuma after he ruined the economy. I bet they are in cahoots with each other. These amounts they get paid is excessive. It is obscene and I hope it comes to the attention of the Unions and staff in each of those companies. What a disgrace!

A rose by any other name is still a rose. If the tables above are to be believed, then those remuneration packages are obscenely excessive. The lowest paid to Rene Medori is over R3 million a month average, while Investec’s Hendrik du Toit gets over R7 million a month. Discovery’s Neville Koopowitz gets R3.4 million a month and if one takes into account what other Discovery top dogs are earning, it is no wonder our medical aid rates are so high.

I know the monthly packages I have shown include bonuses, incentives, and other euphemistic figures, but whatever it is called it is obscene and disgraceful. No wonder so many people are on strike. I think I will support them in future in the light box this revelation.

The Investec remuneration numbers are eye watering.

Methinks the customers do not get a reciprocal amount of service and value for the money that they invest with them.

Ah, we are so critical of Juju and his ilk when they spew their comunist rethoric, yet when market forces determine these salaries for the most part we seem to agree with him (using different wording)

Here is your options
1 – Do not invest in companies were you think Execs are overpaid. (And if you do, you are by very definition saying that you believe that they are going to add value)
2 – Refrain from using their services
3 – Work you backside off and become one of them, either through climbing the ladder or start your own form

End of comments.



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