“Reduce your CEO’s salary and chase him to developed countries!” PwC report warns


South Africa cannot dramatically reduce CEO and executive pay, in response to persistent concerns about obscene salaries at the top end, without risking the loss of talent to more developed countries where is it better remunerated, a Price Waterhouse Coopers (PwC) report cautions.

Contrary to what critics think, notes the report, executive pay in the country is not the highest or amongst the highest in the world. In countries such as the US and UK, the ratio of CEO pay to average company pay is significantly higher than South Africa’s 73 times. The US and UK weigh in at 164 and 93 respectively, while better performers are Norway (30), Australia (55) and emerging market peer India (32).

Instead, the most practical ways to deal with the contentious executive pay issue that PwC suggests are: senior management pay should be treated with restraint; increases should be modest; focus must be placed on the link between pay and performance; and extremes of pay from inappropriate bonus and share plans avoided.

Leave a Reply

Your email address will not be published.