In Executive Salaries In South Africa: Who Should Have a Say on Pay?, the 2012 executive pay packages of 50 of South Africa’s largest and most influential listed companies are examined.

A 2006 study by Crotty and Bonorchis revealed that, on average, the CEOs got paid more than R15 million a year – more than 700 times the minimum wage in certain industries. The authors predicted that without government intervention, executive packages would continue to sky-rocket. Unfortunately these predictions have come true, despite employment equity measures and changes to corporate governance requirements in King III. The average cash and benefits package of the 50 CEOs studied in 2012 came to almost R13.1 million and once the gains on the vesting and exercise of share options is included, this average rises steeply to almost R49 million.

South Africa’s widening income inequality and its history of racism, poverty and social unrest demand that something more be done to reverse this trend. But what will it take for companies to rein in excessive executive salaries? In Executive Salaries In South Africa we consider these questions:

• How do you strengthen the shareholder’s say on pay to ensure that the board of directors responsible for setting pay take into account multiple stakeholder interests?
• Should the courts, the Department of Labour, employees, the tax man or the remaining 99% of society have a say on what the 1% are being paid?
• How do you modify corporate governance standards, the tax code and labour legislation to achieve these goals?
• How do we turn shareholders into activists and empower the workforce?
• Is change only possible if a more fundamental shift in attitudes is achieved?

This book addresses these pressing issues and considers possible mechanisms to rein in excessive executive pay. Without these interventions, South Africa will continue on a path of instability and unrest, while the rich get richer and the poor become poorer.

South African chief executives are apparently worth their weight in gold. With gold trading at R138 000 a kilogram at the time of going to press, and the average chief executive probably weighing in at 90 kilograms give or take a business lunch or two, paying a chief executive in gold would cost R12.4 million. Which is not far off the average pay of the chief executives investigated in this title. The authors have taken 50 of the largest and most influential companies listed on the JSE and measured the companies and their chief executives against a number of criteria. They have also looked closely at some of the circumstances that have allowed executive remuneration to go largely unchecked. Executive pay in South Africa attempts to provide an insight and makes some suggestions as to how various stakeholders could better deal with executive pay. If executives want to reverse the growing sense of public cynicism and concern around the multi-million rand packages they take home each year, they will need to explain the link between their pay and their performance.