Companies paying more attention to pay gaps, study finds
PwC says listed companies have awarded junior workers much higher salary increases than senior executives in an attempt to narrow the divide
JSE-listed companies are growing more sensitive to their internal pay gaps, awarding junior workers much higher salary increases than senior executives in an attempt to narrow the divide, says PwC.
For the 12 months to April 2017, JSE-listed firms gave junior workers an average 16% salary increase, while executives received an average 5.7% rise in pay, PwC said on Thursday on the release of its report into the remuneration trends of executive directors.
Inflation over the period averaged 6.6%. Executives were awarded increases below this because they came off a much higher base relative to junior workers.
The large salaries paid to executives continue to be a hot topic of debate in a country with rising unemployment and one of the worst rates of inequality in the world.
Last week, Deloitte released a report showing that senior executives in the JSE’s Top 100 companies earn an average R69,000 a day. This as the country’s official unemployment rate reached its highest level since 2003 in the first quarter, at 27.7%.
It was encouraging to see an improvement in the salary level of the lowest-paid workers, but there were questions over whether this would help solve unemployment, since it made entry-level jobs more expensive, said PwC partner, Martin Hopkins.
"Ethically, companies should be able to pay everyone a living wage," Hopkins said.
A living wage allowed individuals to live a "dignified but frugal lifestyle".
PwC estimated a living wage to be about R10,000-R12,000 a month.
The median guaranteed executive pay for all JSE executives was R3.9m for the period, or $292,000.
In contrast, the median guaranteed pay for executives of FTSE 100 companies, converted to US dollars, was $1m.
Average pay for CEOs at the top 10 JSE-listed companies came in much higher at R24.6m.
This was because the majority of these CEOs — who worked at companies such as Naspers, Richemont and BHP — were paid in foreign currency, said Hopkins.