Execs’ pay worries Banking AssociationComment on this story
Johannesburg - Executive pay is creating a problem because of the country’s income inequality, according to Cas Coovadia, the managing director of the Banking Association of SA.
“I don’t think we can sustain a situation where a corporate makes a loss or has flat results and the executive renumeration” rises, Coovadia said in interview in Abuja, Nigeria.
“I think a link between performance and executive remuneration needs to be clearer.”
He was not more specific.
Coovadia said his association would start engaging with its members on the issue of executive pay.
“Given the context in South Africa, there’s no doubt, even if it’s just optically, that it creates a problem,” said Coovadia, who is attending the World Economic Forum in Abuja.
“In the long term, it’s just not sustainable.”
Standard Bank Group paid its joint chief executives, Sim Tshabalala and Ben Kruger, more than R28 million each last year, about 56 percent more than their predecessor, after profit was little changed.
That was more than 1 000 times the minimum wage for a domestic worker in South African cities, based on Department of Labour figures.
“Market pressures are driving remuneration for top specialised banking and financial services talent upward, towards developed market norms,” Ted Woods, the chairman of Standard Bank’s remuneration committee, said in the company’s annual report.
Absa chief executive Maria Ramos was paid a total of R28.7m for last year, while Nedbank Group paid its chief, Mike Brown, R32.5m. – Bloomberg