We all knew on some level that the lockdown had negatively impacted the salaries of a large number of South Africans, but the extent to which this was the case remained largely unclear.
Reports that look into where we are in terms of take-home pay look pretty grim, with low-income earners suffering, and monthly salaried workers facing the reality that one in five private-sector jobs are at risk.
Not everyone is toughing it out, though.
The CEOs of big companies, even those who have had to take a bit of a pay cut, are still raking in disproportionately large salaries.
PWC has published its latest executive director report, which breaks down how much top CEOs earn in South Africa. Apart from coming in at 66 times more than the lowest-paid employees taking home the national minimum wage, it’s also considerably more than the international standard for the ideal CEO to average worker ratio, which the Harvard Business Review places at between 20:1 and 25:1.
The report analyses executive pay during the period from 1 May 2019 to 29 February 2020, focusing primarily on executive remuneration among companies listed on the Johannesburg Stock Exchange (JSE), and including high-level analyses of executive remuneration in FTSE 100 and 250 companies and in companies listed on seven selected African stock exchanges.
The top 10 companies listed on the JSE are predominantly those with primary operations based in foreign territories. Therefore, the CEOs are mostly paid in foreign currency.
Before we crunch the numbers, here’s an overview of where we are in terms of equality when it comes to those leading the pack.
STI refers to short-term incentives:
The report also found that that 86% of CEOs at the 100 biggest companies were white and that they earn on average 15% more than the median salary of their black, coloured, and Indian counterparts.
Moving on to a breakdown of the average salaries, before and after tax, for the CEOs of companies listed on the JSE.
TGP refers to Total Guaranteed Package:
If we exclude foreign-based companies and turn instead to the top 10 South African companies listed on the JSE, the data shows, according to BusinessTech, that the “TGP is R11,500,000 pre-tax and R6,325,000 post-tax”.
The table below analyses the median CEO TGP compared to the income reference points for the lower-level employee, showing how many times the median CEO TGP exceeds the lower end employee income:
The report highlights extreme disparities between higher and lower-level employees, which suggests that if the economy is to sustain itself, we need to reassess what we mean by a ‘living wage’.
In this sense, the focus should be on increasing the wages of those on the bottom rung of the ladder instead of simply capping the salaries of those at the very top as has been suggested, especially under the current dire economic circumstances in the midst of a pandemic.
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