The 2018 edition of Deloitte’s annual Executive Compensation Report, showing what top executives earn in South Africa across various industries, has just been published.
The report looked at over 250 JSE-listed companies, which ranged from top-tier (high market cap) groups to mid-tier and low-tier companies, analysing the remuneration disclosures of executives over the past seven years.
The professional services firm splits executives into four main industries – mining, construction and resources (MCR), industrial and manufacturing (IAM), commercial, trading and technology (CTT) and financial, property and investment services (FPI).
Executives in the MCR sector came out as top earners, with an average of R11,6 million for chief executives and R6,2 million for financial leads. This is followed by the CTT sector (R10,5 million and R5,3 million for CEOs and CFOs, respectively), the FPI sector (R9,5 million and R5,1 million), and finally the IAM sector (R4,9 million and R2,9 million).
According to Deloitte’s data, at the lower quartile and median total guaranteed pay levels, the FPI and IAM sectors are some 20% below that of the CTT and MCR sectors. However, at the upper quartile level, the IAM sector lowers even further, to be closer to 30% to 40% behind the rest.
“If one looks at total annual compensation rather than total guaranteed pay (the inclusion of bonuses into annual remuneration), the IAM sector remains well below the other sectors, the FPI sector has recovered to exceed the CTT sector, but both are still below that of the MCR sector,” Deloitte said.
“If one looks at total remuneration (adding in now accruals in the year from long-term incentives) the IAM sector still remains well below the other sectors, the FPI sector has lost ground to the CTT sector, and both are still below that of the MCR sector.”
Deloitte said that this trend is a continuation of one identified in 2017, where it appears that the MRC sector is paying significantly more than the other three sectors in all elements of pay. Similarly, it appears that the IAM sector is paying considerably less.
However, the group said that, while the data is statistically sound, it is materially influenced by the number of very large companies and second-tier companies in the sector composition.
“The total remuneration figures and to a certain extent the total annual compensation figure will be influenced by external factors, market and economic, which can affect various sectors in different ways at any time,” Deloitte said.