The 16th edition of the Executive Pay Barometer details the period from July 2020 – December 2020
Last year (2020) was characterised by the Covid pandemic, economic recession and unemployment.
South Africa’s annual real GDP decreased by 7% in 2020 and unemployment hit a record high in Q4 2020, at 32.5%. Whether directly or indirectly, most South Africans have been impacted by the economic fallout from the Covid-19 pandemic.
Although global economies have experienced declines, the JSE has soared in the direction of the 70 000 points barrier (All Share Index). This would seem counter- intuitive, however, one must bear in mind that what is measured by the JSE and what is measured by the gross domestic product are very different concepts that do not necessarily have a positive correlation.
The impact of the Covid pandemic on long term incentives has been negligible since the JSE All Share Index has rebounded and grown beyond pre-Covid-19 levels.
The barometer uses publically available financial data, from listed companies’ financial and remuneration reports for the most recent 6 month period, to report on:
- Executive annual increases
- Executive variable pay ratios to total guaranteed pay:
- Short-term incentives
- Long-term incentives
- Prevalence of types of share schemes
- Executive remuneration components by company size
- Executive remuneration components by industry
- Wage gap by company size and industry
Total Guarenteed Package (TGP) and Increases
(The wage is described as the CEO TGP expressed as a ratio of the median A,B,C Band employee’s TGP)
Short Term Incentives (STIs) &
Long Term Incentives (LTIs) as a % of TGP
- 2020, was a difficult year economically, however, the JSE is running at record highs.
- The wage gap has marginally decreased.
- Whether or not the record unemployment rate and social impact of Covid will place a renewed focus on shareholder activism and executive remuneration packages will be seen in the coming year.
- The South African Reserve Bank predicts economic growth of 3.8% for 2021. Although this is less (in absolute terms) compared to how much the economy contracted last year, it does represent the start of a recovery that will hopefully gain momentum.
Thank you for your interest in the 21st Century Executive Pay Barometer
B.Com (Hons) Economics
B.Sc Chem. Eng., MBA – Leadership & Sustainability