Public 'say on pay' activism in South Africa : Targets, challengers, themes and impact
Date
2019-10-22
Journal Title
Journal ISSN
Volume Title
Publisher
AOSIS
Abstract
Background: Shareholders and other stakeholders in South Africa are increasingly raising
their concerns in public about seemingly excessive executive remuneration. Most of their
criticism is rooted in the large and growing wage gap in the country.
Aim: The authors investigated the nature of the entities whose executive remuneration
policies and practices were publicly criticised, the types of challengers involved in this social
movement, key issues raised and the impact that the challengers had on the targeted
executives’ remuneration.
Setting: Public activism involving five South African state-owned enterprises and 38 companies
listed on the Johannesburg Stock Exchange.
Methods: Executives and entities that were targeted in public were identified from three
online financial newspapers published between 01 January 2010 and 31 December 2016. A
total of 92 events were recorded involving 65 executives. Data on these executives’ emolument
and three control variables were sourced from Bloomberg. Descriptive statistics and mixedmodel
analysis of variance tests were employed to evaluate the quantitative secondary data.
Results: In line with the extant literature, most of the targets were large, well-known
companies. Individual and minority shareholders represented the largest category of
challengers, followed by asset managers and trade unions. The vast majority of concerns
centred on the size and composition of executives’ packages and insufficient justifications
provided by remuneration committees. The total pay, bonuses and other performance-based
incentives decreased significantly in the year after the companies were publicly targeted.
Conclusion: The findings suggest that public ‘say on pay’ activism can be an effective
mechanism in addressing seemingly excessive executive emolument.
Description
CITATION: Viviers, S. et al. 2019. Public 'say on pay' activism in South Africa : Targets, challengers, themes and impact. South African Journal of Economic and Management Sciences, 22(1):a3251, doi:/10.4102/sajems.v22i1.3251.
The original publication is available at https://sajems.org
The original publication is available at https://sajems.org
Keywords
Shareholder activism, Executives -- Salaries, etc., Consumer movements, Income distribution -- South Africa
Citation
Viviers, S. et al. 2019. Public 'say on pay' activism in South Africa : Targets, challengers, themes and impact. South African Journal of Economic and Management Sciences, 22(1):a3251, doi:/10.4102/sajems.v22i1.3251.