Johannesburg – South Africa's top banking executives are earning eye-watering sums, with some CEOs taking home over R100 million, according to recent financial disclosures. The hefty pay packets come as a new law mandates greater transparency in executive compensation, shining a spotlight on the vast disparities between CEO earnings and those of ordinary employees.
The Companies Amendment Act, signed into law in July 2024, requires public and state-owned companies to reveal the salaries of executives, directors, and regular staff. This landmark legislation aims to promote fairness and accountability in corporate compensation practices. In line with the Act, major banks, including Standard Bank, Absa, FirstRand, and Nedbank, have disclosed details of their CEO and staff salaries in their financial results for the six months ending 31 December 2024.
The disclosures reveal that leading the pack is Nedbank CEO Jason Quinn, who received a total awarded remuneration of R106 million. While his guaranteed salary was R6 million, the bulk of his compensation came from two cash performance incentives, one delivered in cash and the other in shares. Nedbank's headline earnings increased by 8% to R16.9 billion, and the bank reported that total staff received more than R22 billion in 2024. Furthermore, the lowest-paid full-time permanent employees earned R225,000 a year (R18,750 a month) in 2024, with a planned increase to R240,000 (R20,000 a month) in 2025.
Standard Bank CEO Sim Tshabalala also enjoyed a massive payday, walking away with over R89 million in remuneration. His annual salary cost the bank more than R10 million, with the remaining amount allocated to employer retirement contributions, benefits and allowances, cash incentives, deferred incentives, the Performance Reward Plan (PRP), and the Nominal dividend on PRP award vesting. Standard Bank's financial results showed headline earnings of R45 billion, and the bank spent R27 billion on staff salaries and wages, plus R1.5 billion on pension and other post-employment benefit costs.
Absa CEO Charles Russon received total remuneration of R35,472,245 in 2024. His salary amounted to R6,456,843, with R245,940 for medical aid, R196,856 for retirement benefits, and R72,606 for other employee benefits. The rest of his remuneration included a cash award of R7.25 million, a deferred share award of R6.25 million, R13.5 million for total short-term incentives, and a long-term incentive award (on-target award) with a face value of R15 million. Absa's staff costs for 2024 totalled R33 billion, including R26 billion for salaries, R3 billion for bonuses, and R524 million for training. The bank's profit increased by 10.37% to R24.90 billion during the period.
FirstRand, the parent company of First National Bank (FNB), Wesbank, and RMB (Rand Merchant Bank), did not include executive and director salaries in its financial results for the six months ending 31 December 2024, but the group's profit increased by 10% to R22.53 billion. Staff expenditure was R22 billion, with direct staff expenditure (salaries) being R17 billion. According to the remuneration report for the year ended 30 June 2024, FirstRand CEO Mary Vilakazi, who stepped down on 1 April 2024, received R9.4 million as total guaranteed remuneration. FNB’s CEO, Harry Kellan received guaranteed remuneration of R9.4 million. The remuneration report included that the group spent R48.7 million for the staff assistance trust, assisting 5,780 employees with their children’s school expenses (tuition fees and stationery) for the 2024 school cycle.
The significant differences in CEO compensation reflect the immense responsibility they carry for a company's success or failure, as well as their specialised skills and experience. However, the vast disparities between executive pay and average worker salaries have sparked debate about fairness and equity in the corporate world.
Several factors influence how a CEO's remuneration is determined, including company performance, industry standards, market conditions, the CEO's experience, and company size. The board of directors plays a key role in setting CEO compensation, which typically includes a basic salary, annual bonus, short-term and long-term incentives, and benefits.
The new transparency law is expected to fuel further discussions about executive pay and its relationship to company performance and employee well-being. As more companies disclose their compensation practices, stakeholders will be able to better assess whether executive pay is justified and aligned with the interests of shareholders and employees alike. The disclosures are also likely to prompt calls for greater accountability and a more equitable distribution of wealth within South Africa's corporate sector.
