[imagesource: Dimitri Vervitsiotis]

I’m sure we’ve all sat at our work desks wondering how much more our boss is earning than us.

Fair enough.

We are all curious about how much our fellow employees earn and how much we earn in comparison, and that’s also true when it comes to our company’s executives.

In fact, it is often a point of contestation all over the world, which very much includes South Africa.

With this in mind, a new bill is being introduced that will force companies to be more transparent about the difference between the lowest- and highest-paid earners.

You could soon know exactly what your boss is earning and whether you might be the lowest, average, or highest-paid earner in comparison to everyone else you work with.

The bill was first raised three years ago, and President Cyril Ramaphosa’s cabinet has approved the Companies Amendment Bill of 2021.

It is currently open to comments from the public and is set to become official in the next few weeks, per BusinessTech.

The bill will include disclosures around executive pay in the country on an annual basis, including:

• The total remuneration of the highest-paid employee in the company;
• The total remuneration of the lowest-paid employee in the company;
• The average and the median remuneration of  all employees;
• The remuneration gap reflecting the ratio between the lowest and the highest-paid employees.

A key focuses of the new bill is ‘wage ratios’, which was confirmed by the Department of Trade, Industry, and Competition.

However, the exact details of what will be required from companies in the 2021 version of the bill are still unclear.

As mentioned before, big gaps between wage ratios have been a problem in the past, with many JSE-listed companies coming under fire from shareholders for high levels of executive pay.

Statistics South Africa shows that an annual salary of around R282 312 is being paid to employees in the formal sector (excluding any additional bonuses or incentives).

Meanwhile, professional services company PwC published data that shows how much executives get in the country:

[Data from]August shows that total guaranteed package (TGP) fees paid across the JSE give a median salary for chief executives at R5,17 million over the period.

The median pay for chief financial officers was R3,34 million, and the median pay for executive directors was R3,32 million.

Transparency is long overdue, but it won’t necessarily close this giant wage gap.

[source:businesstech]