File Image: IOL

DURBAN - Shoprite Holdings chief executive Pieter Engelbrecht has received a total remuneration of R31.26million for 2017, including bonuses, according the the retailer’s annual report. Engelbrecht’s annual salary in his first year as chief executive was R9.71m.

The retailer has a 31.9percent market share and employs 143802 people. Former chief executive Whitey Basson, who stepped down last year, earned about R100m in 2016. Basson, who left Shoprite at the end of last month, in 2017 earned R50.11m including bonuses.

Shoprite said in the report that it took some issues into consideration when designing the executives’ pay. “We are experiencing a technical recession in an unsettled economy with a weakening currency and downgrades by international rating agencies. Consumer spending has noticeably decreased to the detriment of all businesses.

Outperformed

“However, Shoprite has outperformed the retail industry in terms of growth and shareholder return. One of our key measures of success is trading profit which increased by 11.6percent,” the group said.

The issue of executive pay has always been a thorny issue both in South Africa and abroad. In addressing the subject last year Dr Mark Bussin, executive committee member at the South African Reward Association, provides insight to the three main methodologies of how executive pay is determined in South Africa.

He said companies use market benchmarking when determining how much their executives should earn. Shoprite has a market capitalisation of around R122.97billion as of last Friday. The other methods that companies use as per Bussin are competitor model and job-sizing.

- BUSINESS REPORT