Why do CEOs have such huge pay days?

Annual company results reports have revealed that CEOs receive remuneration packages that are worth millions of rand, but are they really worth it? File Picture: Karen Sandison / Independent Newspapers

Annual company results reports have revealed that CEOs receive remuneration packages that are worth millions of rand, but are they really worth it? File Picture: Karen Sandison / Independent Newspapers

Published Jul 7, 2024


A slew of South African companies have recently announced their annual results, and along with their results, the remuneration packages of CEOs and executives that will make your eyes water.

Bob van Dijk, former CEO, Naspers received a R330 million pay day for the latest financial year, while Fani Titi, group CEO at Investec was paid £5.2 million (R188.87 million) for the 2023/2024 year.

Shameel Joosub, chief executive, Vodacom bagged R64 million in earnings for the 2023 financial year. Sim Tshabalala, CEO, Standard Bank and Arrie Rautenbach, CEO, Absa, earned R83.3 million and R40.03 million, respectively.

Why are CEOs paid so much money?

According to Salary.com, CEOs of companies are paid the big bucks because they are the top employees with huge responsibilities.

Salary.com said that CEOs offer a standard of talent that is required to produce company profits and perform well.

According to salary comparison site Salary Explorer, being a CEO is a lucrative career due to the vast scope of impact, as well as the risks involved.

Another perspective, according to Salary.com is that there is a limited number of people that can manage the skills and responsibilities that come with the job of CEO.

“That is why the market has determined that people with these skills are worth a lot of money to their companies,” Salary.com said.

What is a remuneration package?

According to the South African Revenue Services (Sars), a remuneration package refers to any amount of income that is paid/payable to a person.

It is can be paid in the form of a salary, bonus, wage, gratuity, pension, leave pay, emolument, commission, annuity, stipend, overtime, superannuation allowance, retirement allowance, lump sum benefit payment, etc.

Kwanele Ngogela, senior Inequality Analyst, at non-profit shareholder activism organisation Just Share said that there are various factors that make up a remuneration package.

“Remuneration packages include guaranteed pay, short-term incentives (STIs) and long-term incentives (LTIs),” Ngogela said.

Guaranteed pay for a CEO includes their monthly salary as well as fringe benefits like medical aid and a retirement annuity (RA).

Short-term Incentives (STIs) can include an annual bonus for the CEO, as well as an incentive for meeting certain targets.

Ngogela said that Long-term Incentives (LTI) are based on share options and can range between R15 million to R100 million.

“The LTIs are really ridiculous, and they are twice as much as guaranteed pay,” Ngogela said.


It is clear that the remuneration packages that CEOs earn is worlds apart to what the regular worker in a company would earn.

Ngogela said that remuneration packages are grossly high, and in some cases, a CEO can earn 1,000 times more than their lowest earning employee.

According to Ngogela, the salary discrepancy between a CEO and regular worker can only be compared at companies that have disclosed the salaries of their employees.

However, the new amendments to the Companies Act could see this change.

According to Labour Research Services, the Companies Amendment Act will compel companies to disclose the gap in pay between the highest paid employees and the lowest paid employees.

Labour Research Services said that the amendments will require companies to disclose the total remuneration of the top 5% highest paid employees and bottom 5% lowest paid employees of the company.

While these amendments can bring some change, Ngogela said that the gap in pay between a CEO and a regular employee is not reducing, as CEO’s continue to receive exorbitant pay packages.

“Executive members will continue to earn more, but it is important that workers earn a living wage too,” Ngogela said.


Ngogela has called for accountability and transparency with regard to remuneration packages in SA, as the criteria used by remuneration committees to determine remuneration is not clear.

The Corporate Governance Institute refers to a remuneration committee as a group of people on a company’s board of directors that are tasked with setting the salaries and other forms of compensation for the executives, including the CEO and other senior executives.

One of the issues that Ngogela highlighted is that shareholder rights are weak, as they can offer suggestions about remuneration, but the board of the company will ultimately have the final say.

Having CEOs being invited to attend remuneration committee meetings where their salaries are being set is also a serious problem, according to Ngogela.

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