Johannesburg - The King IV Report on Corporate Governance proposals on the disclosure and voting requirements on remuneration are meant to enhance transparency and are unlikely to lead to a decrease in executive pay.
Deloitte’s director of risk advisory, Nina le Riche, yesterday said the move put South African on a par with international norms as remuneration was not only topical in South Africa, but was a bigger issue in Europe and the US.
There was no legal requirement on companies to address objections and concerns of shareholders if 25 percent of the shareholders voted against the company’s remuneration policy or implementation report, Le Riche said. But the King IV requirements would make it difficult for the companies to ignore the shareholder concerns.
While there were concerns about remuneration, executives still had to be paid fairly. “These are people who can work anywhere in the world. I don't think the increased disclosure will lead to decreased remuneration,” said Le Riche.
The report was formally launched by the King Committee on Corporate Governance in South Africa and the Institute of Directors in Southern Africa on Tuesday. King IV aims to foster enhanced accountability on remuneration.