When amendments to the Companies Act are signed into law, companies will have to disclose the gap between the highest-paid and the lowest-paid employee. Amendments to the Act will compel companies to reveal the gap between the lowest-paid worker and the chief executive, essential information in a country often described as the most unequal in the world. The amendment to Section 30 of the Companies Act has been passed by parliament and is to be signed into law by the president.
It will compel JSE-listed companies and public companies like Eskom to disclose pay ratios and give shareholders binding voting power on remuneration policies. Companies will have to disclose total remuneration of the highest-paid employee, the lowest-paid employee, average remuneration of all employees and median total remuneration of all employees. The new rules will help the public understand the “reasonableness” of these pay structures.
Is it reasonable to pay a chief executive R50 million a year? Shoprite reported paying its CEO Pieter Engelbrecht R68 million in its 2024 financial year. Shoprite provides over 150 000 jobs.
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These workers, in turn, spend money at other local businesses, and keep money circulating in the country. Some banks and investment firms, pay extremely high packages and employ few people. Banks also have few low-paid workers. The Labour Research Service (LRS) monitors about 70 JSE-listed companies and for the 2024 financial year, for the first time, we have looked at pay ratios for the JSE top 40.
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