By Rene Vollgraaff.
President Cyril Ramaphosa signed amendments to the country’s Companies Act which will require firms to disclose the pay gap between their highest- and lowest-paid workers.
All public and state-owned companies must now report the average and median total remuneration of all employees, and disclose the earnings gap between the total pay of the top 5% highest paid employees, and the total of the bottom 5% lowest paid workers, the Presidency said in a statement on Friday.
The Companies Amendment Act “addresses public concerns regarding high levels of inequalities in society by introducing better disclosure of senior executive remuneration and the reasonableness of the remuneration, “the Presidency said.
South Africa is one of the world’s most unequal nations, a legacy of the system of racial discrimination that disadvantaged the Black majority and ended in 1994. Top executives can make in excess of 20 million rand ($1.1 million) a year, while the official minimum wage is 27.58 rand an hour.
The Companies Second Amendment Act, also signed by Ramaphosa on Friday, extends the time limit for declaring a director of a company delinquent to 60 months from 24 month and gives the court the power to extend the period if good cause is shown.
Those changes were in response to recommendations of a judicial commission that probed so-called state capture under former President Jacob Zuma.
“The State Capture Commission recommended that Section 162 of the Companies Act be amended so as to ensure that an application for a declaration of delinquency may be brought even after two years on good cause shown.
“While the recommendations applied to specific cases, the new law extends the time bar for declaring a director of a company a delinquent director from 24 months to 60 months. It also gives the court the power to extend the period on good cause shown,” Presidency concluded.