A multi-stakeholder view on director remuneration guidance in South Africa. (2nd September 2022)

• Record Type: Journal Article
• Authors: van Zyl, Marilee; Mans-Kemp, Nadia
• Is Part Of: SA journal of accounting research. Volume 36:Number 3(2022)
• Page Start: 195
• Page End: 212
• Publication Date: 2022-09-02
• Subjects: director remuneration -- pay gap -- three-part remuneration report -- King IV Report -- South Africa -- stakeholder salience theory; Accounting -- Periodicals; Accounting -- South Africa -- Periodicals; Accounting -- Research; South Africa; Periodicals; 657.05
• DOI: 10.1080/10291954.2021.1938882
• Languages: English
• ISSNs: 1029-1954

Abstract

Abstract : Purpose: Given South Africa's well-developed governance framework, considerable wage inequality and sizeable executive packages, this study was conducted to reflect on the aptness and application of the King IV director remuneration guidelines. Design: The views of 23 representatives of institutional investors, remuneration committee members and leading executives of financial services companies were gauged on the King IV remuneration recommendations by conducting semi-structured interviews. The primary data were analysed by conducting thematic analysis. Findings: The participants commended the heightened focus on pay-related transparency and reporting quality evident in King IV, in particular the three-part remuneration report and single pay figure disclosure. Participants urged remuneration committees to link executive pay to the six capitals. Practical implications: Government and the Institute of Directors in South Africa should account for the considerable regulatory burden that companies are experiencing when amending remuneration-related regulation in future. More guidance is required to link sustainability considerations to executive emolument. A corporate culture which promotes fair remuneration would benefit multiple stakeholders. Focus should be placed on equal pay for work of equal value. Value: The views of powerful and informed stakeholder representatives were gauged on responsible and transparent remuneration practices in an emerging market with severe pay inequality.