Mind the pay gap
Study shows SA is among worst in the world
SA’s executive pay gap is a symbol of our economic dysfunction — unless you happen to be an executive. A recent study by Mergence Investment Managers found that SA has the fifth biggest average pay gap in the world, after the US, Hong Kong, Germany and the UK.
Mergence reported that CEOs in JSE-listed companies earn on average 140 times more than the average worker, with the gap widening: executive pay inflation has averaged above 10% since 2009, while average wages have risen at below 8%. Shoprite’s Whitey Basson earned 725 times more than the average employee in the period of the study.
A recent Moneyweb study compared executive pay and average pay within each company, as opposed to within sectors as in the Mergence study. It found a more modest ratio: when bonuses were excluded, the average executive earned 21 times the average worker’s salary. But when bonuses were included, CEOs pocketed a total package 47 times bigger than their average worker’s pay.
Ayabonga Cawe, economic justice programme manager at Oxfam, says these figures strip out outsourced workers, who often earn much less than the lowest-paid employees.
Cawe argues that business and government need to reach a consensus on regulating intra-firm pay gaps — with the savings flowing to workers and new productive investment, which is increasingly stunted by comparison to financial investment flows.