Vodacom’s CEO Pieter Uys who received a 23%pay increase for the year to March 2011.

" 'There is increasing pressure on companies to disclose the pay gap'

Gerald Seegers, human resources services director of PwC Southern Africa, said remuneration levels of executive directors had increased "significantly".

In 2009 the median annual guaranteed pay of executive directors - base salary and typical benefits such as pension and medical aid - increased by just 4.56%.

The increase in 2010 is on par with trends in the US. The New York Times quoted a study by Equilar last week in which the median pay for top executives at 200 big US companies last year was $10.8-million, a 23% increase on the previous year.

Seegers said the biggest increases were at large-cap companies in the services industry, which includes media and telecommunications companies. Bosses here enjoyed a 42% increase in their total guaranteed packages, bringing the median pay to R4.7-million.

Telecoms company Vodacom made headlines last week when its annual results for the year to March showed CEO Pieter Uys received a salary increase of 23%.

In comparison, executives at large-cap companies in financial services experienced a 4.86% decline in the median total guaranteed package. This was despite some controversy regarding the high remuneration of several bank CEOs.

In the industrial sector, the total guaranteed package declined by 15.24%. This sector includes, among other businesses, automobiles and parts, chemicals, oil and gas industrial goods and services, and construction and materials.

Members of the National Union of Metalworkers (Numsa) in the steel industry were striking this week and the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu) said on Thursday its workers in the petroleum industry would start striking tomorrow .

In basic resources, where strikes are also threatening, the median guaranteed pay of executives at large-cap companies increased by only 3.2%. This sector also includes forestry and paper companies where the Tissue and Allied Union is also expected to start strike action soon.

Seegers said sectors in which the biggest increases were recorded were mostly those with companies that came out of the recession well.

Medium-cap companies - the next 60 listed after the top 40 - enjoyed an increase of 20.4% to R3.15-million in their executives' guaranteed pay.

But executive directors at small-cap companies (the remainder listed on the JSE main board) suffered a 6.65% decline in median guaranteed pay.

The median guaranteed pay of executive directors at AltX companies increased by 6.03% to R1.25-million.

Short-term incentives to executive directors, which include all cash-based payments that are paid to an individual based on company and individual performance, rose sharply.

For the top 40 listed companies, the median short-term incentives paid to executive directors increased by 57.5% to R3.8-million. At the medium-cap companies the median short term incentives to executives increased by 64.7%.

However, small-cap companies experienced a decline at all levels of short-term incentives to executives. Seegers said this might be because smaller listed companies battled most in the economic downturn and were still recovering.

The report also makes reference to the pay gap at listed companies, a favourite topic of unions during wage strikes.

Seegers said the executive pay gap in SA - the ratio of a CEO's pay to that of the lowest-paid worker in the company - has often been quoted as 300, meaning the CEO receives 300 times more.

But data collected by REMchannel, an online-survey service owned by PwC, shows the pay gap to be about 100.

"There is increasing pressure on companies to disclose the executive pay gap because there is a widening chasm between low, minimum-wage levels and executive director remuneration," Seegers said. "This shows employers may not be addressing market concerns over equitable remuneration."

He said while the pay gap is a global issue, it has become a political issue in SA. Therefore, any form of forced disclosure of the pay gap here would not be adding value, he said.

In the US, the law requires relevant companies to disclose the ratio of the median of the total annual employee remuneration to that of the CEO.

Seegers said the focus in SA should not be about closing the gap once it is disclosed, but rather on job creation and poverty alleviation.

"The focus needs to be on paying employees fairly. Top management needs the recognition to attract the best skills at top level and at the bottom employees need to be given a fair wage for the job they have performed," he said.