The argument around executive remuneration has resulted in a spike in shareholder activism, as investors seek more accountability about the value executives bring and how it’s measured.
In line with the King IV Report on Corporate Governance, the JSE has made it compulsory for listed companies to have remuneration policies in place.For JSE companies, PwC’s report found that most shareholders voted against proposed remuneration structures due to “insufficient disclosure” and policy being “inconsistent with best practice”, among other reasons.Say on pay – a rule in the US that allows shareholders to have a say in executive remuneration – is gaining momentum. Policy is shifting more towards shareholder satisfaction and companies are finding better ways to measure performance and how managers are compensated.Long-term incentives are part of a reworking of remuneration that is being looked at. Instead of executives receiving large amounts in bonus payments, these payments are paid out over several years.
An aspect that some business in the UK are introducing into their remuneration disclosures is a breakdown of pay ratios. These would disclose how much the CEO and top executives earn