Trade and Industry Minister Ebrahim Patel says his department will finalise the Companies Amendment Bill in Cabinet within three months, which aims to narrow the gap between the highest-paid and lowest-paid employees at listed companies.

The proposed Bill, published for public comment in 2021, said that listed companies would have to disclose the ratio of the top-paid to the bottom-paid 5% of workers.

Speaking before Parliament, Patel said that finalising the Bill will help to address South Africa’s inequality issues.

According to the 2021, Gini Index, which measures inequality via income distribution, South Africa had the worst income inequality in the world.

The Bill also aims to ensure stronger governance on excessive director pay and enhanced transparency on ownership and financial records, the minister previously said.

In April 2023, the average nominal take-home pay was R14,534, which marks a major decline from the R15,170 recorded a year prior.

“As companies come under strain from the harsh load shedding, high production costs, rising interest rates and moderating demand, the environment remains unfavourable for comfortable wage increases or job creation,” BankservAfrica said.

“Organisations will likely remain in ‘survival model’ for an extended period of time.”

However, executives at South Africa’s major mining and banking companies continue to earn significantly more.

In 2022, the CEOs of Anglo-American, BHP Billiton, Sibanye-Stillwater, Thungela Resources, and African Rainbow Minerals (ARM) earned an average salary of R131.64 million per year – or R10.93 million per month.

BHP Billiton’s CEO, Mike Henry, took home R269.22 million ($14.7 million) in 2022, including a base salary, short-term incentives, cash bonuses, and long-term incentive plans.

This figure is over four times more than Capitec CEO Gerrie Fourie (R62 million) and five times more than Nedbank’s Mike Brown (R43.6 million.)

Fors and againsts 

The Congress of South African Trade Unions (Cosatu), the country’s largest trade union, previously said that the new Bill is a necessity for South Africa.

“This will help to begin to address the apartheid wage gap still prevalent in many companies, in the mining, banking and retail sectors,” Cosatu said.

“(Cosatu) wants the Public Investment Corporation and other investment funds who manage workers’ pension and insurance funds need to play a more activist role in placing limits on what chief executive officers earn and the wage gaps in companies where they are shareholders,” it said.

However, Business Leadership South Africa (BLSA) chief executive Busi Mavuso previously said that the new laws would hurt South Africa’s image as a place to do business.

“Taken together, these elements diminish the attractiveness of South Africa as a place for companies to do business by adding to all the other onerous compliance requirements,” she said.

“Why would a company, local or foreign, want to list on a South African bourse when we’re putting up so many obstacles while others are doing all they can to attract them? Already we have a problem with companies domiciling or listing in Mauritius or London to avoid the bureaucracy of South Africa’s exchange controls – this is another reason for them to do so.”

---

Read: New laws decriminalising sex work in South Africa hit a major roadblock