Professional services company PwC has published its Executive directors: Practices and remuneration trends report for 2022, highlighting how much top management earns at some of the largest companies in the country.
The report analysed executive pay during the period from 1 March 2021 to 28 February 2022, focusing on executive remuneration among companies listed on the Johannesburg Stock Exchange (JSE).
Across the JSE, there were, from Jan 2020 to June 2022, 208 new appointments into executive positions. And in the JSE Top 100, over the same period, there were 77 new appointments into executive positions, PwC pointed out.
Total guaranteed package
The financial services firm provided a snapshot of the average TGP across three quartiles: lower – median – upper – on the JSE.
TGP represents the portion of total remuneration that is paid regardless of company or employee performance. It is a fixed cost made up of basic pay, plus a cash value attributable to benefits.
An examination of TGP fees paid across the JSE shows that the median salary for chief executives was R5.71 million over the period.
By comparison, the median pay for chief financial officers was R3.63 million, and the median pay for executive directors was R3.76 million.
Super caps
Super caps represent the top 10 companies on the JSE. As at the end of February 2022, these companies accounted for 66% of the exchange’s total market capitalisation. The companies that make up the JSE top ten are shown in the table below, while the figures that follow illustrate remuneration averages calculated for them, PwC said.
An examination of fees paid across the JSE’s super caps shows that the average salary for chief executives was R27.74 million.
The average pay for chief financial officers was R17.99 million, and the average pay for executive directors was R15.45 million.
Short-term incentives
STIs are cash payments that are intended to remunerate executive directors – and other employees – for the achievement of annual business and personal goals, aligned with the organisational strategy.
PwC pointed out that Covid-19 had an impact on the quantum of STIs being paid to executive directors (resulting in lower or no STIs being paid). “We have noted a recovery in STIs to pre-pandemic levels. Generally, the recovery in variable incentives payable should be aligned to the recovery in the performance of companies,” it said.
To assess this, PwC said it analysed the performance of the JSE All Share index (and other indexes) over a three-year rolling period. Based on these analyses, it said that the TSR performance of the indexes has improved.
The data shows that the median STIs across the JSE was R3.37 million, with chief executives typically earning around R4.6 million.
As with the pay data, this number rises significantly at large-cap companies, where the median STI increased as much as 151% million for chief executives, to R13.72 million.-bustech
