South African CEO Pay: A Growing Divide Between the Elite and Everyday Workers

The average CEO among South Africa’s top 200 companies earned an estimated R19.7 million in the 2024 financial year, a staggering figure when compared to the average formally employed worker’s salary of R329,400 per annum. The disparity between the highest-paid executives and everyday workers in South Africa is not just vast—it continues to spark heated debates about income inequality and fair compensation.

According to the PwC 2024 Directors’ Remuneration and Trends Report, the median total guaranteed pay (TGP) for CEOs of the top 200 JSE-listed companies stood at R8 million per annum. When short-term incentives (STI) and long-term incentives (LTI) are included, the total median remuneration package jumps to an estimated R19.71 million annually. While these numbers reflect the financial compensation of CEOs, the real impact is more apparent when compared to the earnings of the average formal sector worker.

The average non-agricultural employee in South Africa earned R27,450 per month (R329,400 annually) in the second quarter of 2024, according to Stats SA. This means that CEOs of the top 200 companies earn nearly double in just one day what an average worker earns in an entire month. For every R1 earned by the typical formal sector employee, a CEO in South Africa’s upper echelons takes home approximately R60.

This pay gap is a key contributor to the country's stark economic inequality, a hot-button issue in a society already fraught with significant income disparities. The gap between the highest earners and the lowest earners in South Africa is not new, but it has become a focal point for public discussions about wage fairness, especially as the economic pressures facing South African households continue to intensify.

Yet, the debate around CEO pay is not solely about numbers. South Africa’s top executives operate in one of the world’s most challenging business environments. The country’s economic landscape has been marked by slow GDP growth, high inflation, energy supply disruptions, and socio-political instability. In such a volatile climate, CEOs are tasked with driving organizational performance while balancing shareholder interests, ensuring regulatory compliance, and providing leadership in environmental, social, and governance (ESG) matters.

The role of a CEO in this context is not just about managing internal operations but also about navigating external challenges. These include labour relations in a country where unemployment is high and worker rights are heavily scrutinized. The complexity of the role, compounded by the global economic impacts of the COVID-19 pandemic, requires CEOs to guide their organizations through crises while ensuring business continuity and adapting to a rapidly evolving business environment.

While the pay gap remains a contentious issue, it is essential to understand the significant pressures and responsibilities that come with being a CEO in South Africa. These roles are exceptionally high-stakes, and the performance of CEOs is often measured by more than just financial success. Many companies have introduced compensation structures that tie CEO remuneration more closely to company performance, with a significant portion of their pay coming from short-term and long-term incentives.

However, this focus on performance-based pay does little to alleviate concerns about the widening pay gap between executives and average workers. As many South African households continue to struggle with rising costs, stagnant wages, and increasing debt, the compensation of CEOs is seen by some as disproportionate to the financial realities faced by the majority of the population.

According to the Bureau for Economic Research (BER) Survey of Inflation Expectations for 2024, wages are expected to grow by just 4.9%, while inflation is projected to average between 4.9% and 5.3%. This suggests that many South African workers will experience little to no real wage growth, with any gains in earnings likely to be offset by rising living costs. This situation will continue to strain household budgets, and real wage growth is expected to improve only marginally in 2025.

In this context, the large gap between CEO compensation and average worker salaries becomes even more pronounced. Many South Africans are turning to debt to cover daily expenses, leading to concerns about financial vulnerability and long-term economic instability. As Shannon Bold, a senior economist at the BER, noted in August, the reliance on debt is becoming an increasingly common coping mechanism for households facing mounting financial pressures.

The growing public scrutiny of CEO pay has not gone unnoticed by policymakers. In July 2024, President Cyril Ramaphosa signed amendments to the Companies Act of 2008 into law, which promote greater corporate transparency and aim to address income inequality. Under the new legislation, public and state-owned companies are required to disclose the pay gap between their highest- and lowest-paid employees. Specifically, companies must report the earnings gap between the total pay of the top 5% of highest-paid employees and the bottom 5% of lowest-paid workers.

This move toward greater transparency has been met with mixed reactions. Some argue that it will have a positive impact by shedding light on wage inequality and prompting companies to address disparities within their organizations. Others, however, warn of potential risks, such as public backlash or the unintended consequence of discouraging investment in certain sectors.

Whether this legislation will lead to meaningful change remains to be seen. What is clear, though, is that CEO remuneration at South Africa’s top companies will continue to be a source of public debate. While their compensation may seem disproportionately high, it reflects the considerable expertise, responsibility, and pressures associated with leading major organizations in a volatile economy.

As South Africa continues to grapple with economic challenges, the debate around CEO pay is likely to intensify. For many, the growing pay gap between executives and everyday workers is emblematic of broader societal inequalities, and the push for fairer compensation structures will remain a key issue in the years to come.

At the same time, it is important to recognize the complex nature of CEO roles, especially in a country facing significant economic headwinds. The conversation about executive pay must balance concerns about income inequality with an understanding of the skills, expertise, and pressures required to lead South Africa’s largest companies in an increasingly competitive and uncertain global economy.