What shareholders want to see in C-suite remuneration

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SIMON BROWN: I’m chatting with Makhosazana [Khosi] Mabaso, PwC reward partner. The PwC 2026 Directors’ Remuneration and Trends Report is out. It covers the 200 largest JSE companies to the end of February.

Khosi, appreciate the early time today. CEO salaries up 9%, CFOs’ up 7% – neither of those an eye-watering number.

But perhaps most importantly this is mostly driven by performance-linked incentives, and this is probably what we want to see in C-suite remuneration.

KHOSI MABASO: Definitely Simon, this is what we want to see. We don’t want to see the vast majority of short-term ramping driven by increases in fixed pay.

So it’s encouraging to see that the big portion of it is in short-term and long-term incentives, which means that there’s some alignment between how the companies is performing and what CEOs and CFOs are taking home.

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SIMON BROWN: And importantly, what we’re also seeing is expectations around transparency and accountability continue to grow. Shareholders are supporting remuneration.

When it gets turned down or voted against it make headlines, but the truth is that it’s actually getting a lot more support than perhaps some of the media think. And again, that really is important for RemCo and the corporates.

KHOSI MABASO: Most definitely. And for me what that means is that companies are doing the right thing. They’re engaging with their shareholders. There are less ad-hoc awards being made.

There’s that clear link between paying performance and, as I said earlier or, just to your first question, generally shareholders will be in support if your policy is aligned with performance and the outcomes they’re all approved in the previous year.

So the support just goes to indicate that there’s at least some sort of understanding between companies and their shareholders.

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SIMON BROWN: It’s hugely important. There are still some in the sort of 50-75% range. There’s more to be done, but mostly it’s getting through.

And this comes in the back of the Companies Act change. That is post this period, but my sense, reading the report, is that a lot of companies were sort of getting ahead of the regulation to some degree as well.

KHOSI MABASO: Yes, they were. And especially with the JSE Top 100, if you analyse those RemCo reports, for three years they’ve already started disclosing your fair pay analysis, indicating what it is that they’re doing.

When the Companies Act became effective, it wasn’t a surprise for a lot of entities, because they were either disclosing it already or already calculating it in the background, and starting to deal with those nuances that the numbers were bringing up.

So, the Companies Act is effective [and requires] more transparency. It is now a binding vote from a shareholder perspective, depending on what’s in your rem policy and implementation report. But from a disclosure perspective, a lot of what the Companies [Act] is asking for, companies have already been doing.

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SIMON BROWN: And to the point – I’ve chatted with your colleagues around this a couple of times – it is now binding. But we must again stress the point that there’s actually very large support from shareholders around the support.

It was, what, 83.8% in 2025, rising to almost 90% this year. Very little sort of pushback, truly, around the remuneration reports.

KHOSI MABASO: Yes. And to my point earlier, it is a good indication in a sense that it’s highlighting that companies are doing what they’re supposed to be doing. There’s that engagement.

It now just means further engagement and making sure that you’re ticking everything and doing right by your employees, because you would have seen that with the Companies Act.

The big component of it or the significant portion of it relates to disclosing your highest paid versus lowest paid – those ratios between the 5% getting paid the highest versus the lowest paid.

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So it becomes a matter of the messaging and making sure that you’re implementing those fair-pay policies accordingly.

And at a shareholder perspective, they’ve also indicated that they don’t expect less disclosure. So it’s just continuously doing that and ensuring that companies are doing the right thing.

SIMON BROWN: One area is perhaps lagging: female representation remains low and perhaps as worrying is that they tend to earn less than their male colleagues. Both of those are concerns in the space not directed by or related to the Companies Act or anything. But corporates generally need to need to brush up perhaps in representation gender-wise.

KHOSI MABASO: That is still a very big concern from our side as well – to see when you look at those numbers that the traction is very slow. But also again, when you look at the gap analysis, there’s still an indication that male executive directors tend to earn a little more than female executive directors.

But I think the most important thing is that, as this analysis is done, because we don’t have as rich an analysis system for females as we do for males, that data set for females will always be very volatile.

So we can interpret this data only once we have sufficient females – which means that representation needs to increase.

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SIMON BROWN: That’s actually a great point. It’s a very small dataset and that does make it lumpy and volatile. And frankly more female representation will give us better data.

If we look at non-executive directors, what struck me is they get really good strong shareholder support, which is important because these are your non-executives. But also this is where your true independent directors come from as well.

KHOSI MABASO: Yes. If you’re looking at the support in terms of non-executive directors, we saw that their fees increased at 6.5% for shareholder persons and then at 7.7% for board members. And, with that, there was really a lot of support from a shareholder perspective.

So again, it’s encouraging to see that shareholders are seeing how non-executive directors are contributing from a board level.

But again with this there’s also that link to pay and performance because generally shareholders will say, ‘Before we increase your fees or approve this, is the company even performing?’

So, when we’re analysing the data, we saw a mixture – and obviously this is an indication of the median – but there were instances where companies didn’t give increases at all to any of these depending on performance.

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SIMON BROWN: And again, totally fine. The point of reward is around the performance. That’s exactly what they’re there for.

KHOSI MABASO: Exactly.

SIMON BROWN: Exactly, 100%. We’ll leave it there. Khosi Mabaso, PwC reward partner, appreciate the time.

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