South African retail CEOs – salaries versus shareholder returns

Dis-Chem CEO Ivan Leon Saltzman achieved the best shareholder returns for every rand earned, while Pick n Pay CEO Pieter Boone performed the worst.

Executive compensation has been a hotly debated issue for many years. Workers, shareholders, and boards are all grappling with appropriate pay levels.

Many business leaders highlighted that competitive salaries are required to keep top executives in the country.

There is already a flight of skills out of South Africa, and tampering with executive pay may accelerate this trend at the top levels.

Others argue that company boards and remuneration committees are part of the same system that looks after its own.

Instead of having performance-based packages which reward excellence, executives enjoy high remuneration even if a company performs poorly.

Shareholders often cannot stop the remuneration committee’s policies because of a lack of voting power.

There are even calls for regulators and the Johannesburg Stock Exchange to address shareholder opposition to executive remuneration proactively.

South Africa’s Department of Trade, Industry and Competition has joined the fray through the Companies Amendment Bill 2021.

The bill draws attention to the remuneration gap by forcing companies to be more transparent on the difference between the lowest- and highest-paid earners.

Trade and industry minister, Ebrahim Patel, said one of the bill’s aims is to address public concerns regarding high levels of inequality in society.

Retail CEO remuneration

Daily Investor analysed South Africa’s top retail CEOs’ pay packages by comparing them to shareholder returns.

For this analysis, we calculated the shareholder returns over the latest financial year, in percentage, for every R10 million paid to the chief executive.

Dis-Chem CEO Ivan Leon Saltzman ranked top with a shareholder return of 30.8% per R10 million in his pay package.

Massmart CEO Mitch Slape ranked second with 22%, ahead of Shoprite CEO Pieter Engelbrecht at 17% and Clicks CEO Vikesh Ramsunder at 11%.

On the other end of the scale, Pick n Pay CEO Pieter Boone and Truworths CEO Michael Mark produced negative returns.

The table below shows the shareholder returns, in percentage, for every R10 million paid to top retail CEOs.

CompanyCEOShareholder Return/R10 million CEO pay
Dis-ChemIvan Leon Saltzman30.8%
MassmartMitch Slape22.0%
ShopritePieter Engelbrecht17.4%
ClicksVikesh Ramsunder11.4%
TFGA E Thunström5.9%
Spar GroupBrett Botten5.7%
Mr PriceMark Blair2.5%
WoolworthsRoy Bagattini1.9%
TruworthsMichael Mark-0.5%
Pick n PayPieter Boone-3.2%