Despite shareholders in Shoprite expressing concern over remuneration disparities between employees and executives, the South African grocer paid CEO Pieter Engelbrecht about R64.7 million while chief financial officer Anton de Bruyn bagged R21.1m and is set to earn more in remuneration next year.
Engelbrecht’s total remuneration for the full year (FY) to end July 2, 2023 compares to the R63.5m he earned for 2022. He is set to earn the same amount in 2024, with fixed remuneration making up 29% of this and 71% being variable pay.
De Bruyn, on the other hand, earned R18.5m and will be paid more in 2024. The company’s share price dipped 1.24% to R235.2 on the JSE on Tuesday but is up 5.4% compared to a year ago.
Shareholders in the company complained about “pay gaps across the group”, according to the company’s annual report for 2023. Shoprite has sought to resolve this through efforts to “maintain the separate minimum wage for cashiers” across its stores.
“In line with this, an internal minimum for cashiers was established in FY 2022, and was further enhanced in FY 2023 to R31.11 per hour, which is 10.7% higher than the prescribed retail sector minimum for cashiers of R28.11. The number of cashiers that are eligible to participate is 21 834, of which 88.4% are females,” Shoprite notes in its annual report released this week.
The company has also just announced a “three-year wage increase settlement agreement with Saccawu (the South African Commercial, Catering and Allied Workers Union) that provides certainty to both our shareholders and employees”, it said.
In the year under review, Shoprite raised sales by 16.9% to R215 billion while trading profit was 9.7% stronger at R11.9bn. This translated to a 9.7% leap in diluted headline earnings per share for the period.
As part of efforts to deal with pay disparities, Shoprite says it is developing a one-off executive super stretch incentive scheme, which will be implemented in the 2024 full year period.
“This scheme, which will be over and above the current suite of multi-year incentives, is intended to retain and motivate a select group of senior executives who are key to the delivery of the group’s long-term strategy,” said the company.
It further noted that its remuneration policy was benchmarked against the market using the third-party national and retail surveys for employees below executive level, and the peer comparator group for executives.
“Given the group’s competitive position in the market, adjustments may be made to attract and/or retain scarce or critical skills. Benefits can enhance remuneration packages and are allocated in appropriate formats, across different levels of employment, based on responsibilities and the group’s need to retain specific skills.”
These included “incentives that encourage desired behaviours and support the group’s business and strategic objectives, as defined in individual performance criteria”.
Roy Bagattini, the CEO of retailer Woolworths, earned R122.47m for the 2023 full year, a massive 239% increase on the prior year. About R90.6m was for work in South Africa while as much as R31.8m was payment for work in Australia under the company’s clothing outlet, Country Road.
Parliament, through the portfolio committee on trade, industry and competition has opened public hearings on the Companies Amendment Bill which, in part, is seeking to enhance transparency and good corporate governance around disclosure of pay gaps between the highest and least paid executives and employees.
BUSINESS REPORT