The Congress of South African Trade Unions (Cosatu) says government must move with haste in passing the Companies Amendment Bill into law.
The proposed bill, which was published for public comment at the end of 2021, will require listed companies to disclose the ratio of the top-paid to the bottom-paid 5% of workers.
It also includes a requirement to identify shareholders who are the “true or beneficial” owners of shares in a company.
The country’s largest trade federation said that this new legislation is a necessity, pointing to Sibanye chief executive Neal Froneman who collected a R300 million salary this year.
“This will help to begin to address the apartheid wage gap still prevalent in many companies, in the mining, banking and retail sectors. (Cosatu) wants the Public Investment Corporation and other investment funds who manage workers’ pension and insurance funds need to play a more activist role in placing limits on what chief executive officers earn and the wage gaps in companies where they are shareholders,” it said.
High levels of pay among executives is a huge point of contention the world over, including in South Africa. Several JSE-listed companies have come under scrutiny from shareholders for high levels of executive pay.
2020 saw a significant spike in shareholders of listed companies voting against high executive pay at Annual General Meetings, particularly in the finance sector.
While the proposed bill has been welcomed by some sectors of the economy, experts have warned that it could ultimately lead to disinvestment from South Africa.
Business Leadership South Africa (BLSA) chief executive Busi Mavuso has warned against sections of the Draft Companies Amendment Bill, saying that it will impact South Africa’s attractiveness as a place to do business.
“Taken together, these elements diminish the attractiveness of South Africa as a place for companies to do business by adding to all the other onerous compliance requirements,” she said in October.
“Why would a company, local or foreign, want to list on a South African bourse when we’re putting up so many obstacles while others are doing all they can to attract them? Already we have a problem with companies domiciling or listing in Mauritius or London to avoid the bureaucracy of South Africa’s exchange controls – this is another reason for them to do so.”