Why shareholders must now take the lead on remuneration disparity
This paradigm shift will help address the country’ s income inequality levels in the long run
Remuneration disparity in SA is a stark example of the income inequality conundrum facing our country. Salaries across the pay band, from CEO through to blue-collar workers, are increasingly under the spotlight. If the interests of shareholders are to be properly aligned with those of company management in terms of setting and implementing company strategy effectively, then we must rein in the issue of unchecked executive remuneration or face the prospect of poor or misaligned implementation of company strategy. Inaction by shareholders in this area will exacerbate the income inequality that continues to blight SA. The King IV report has set out the requirement that should a company have more than 25% of shareholders vote against its remuneration policy, the company is required to engage with dissenting shareholders. At the very least, such steps should include an engagement process to ascertain the reasons for the dissenting votes, appropriately address legitimate and reasonable ob...
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