The CEO of South Africa’s highest-paying JSE-listed company earns more than 6,000 times the national minimum wage, according to data published by the Labour Research Service. Across the top 20 JSE-listed employers by CEO pay, every company exceeds 939 times that benchmark.
Under the Amended Companies Act, which came into force on 22 May 2026, companies are now required to disclose those ratios. They must also disclose the full remuneration of every director and prescribed officer at public and state-owned companies in an annual report submitted for binding shareholder approval. For the first time, a vote against that report has real consequences.
Practical questions for boards
Sections 30A and 30B of the Companies Act are now in force. Section 30A requires companies to prepare a remuneration policy (Policy). It must then submit the Policy for shareholder approval by ordinary resolution. Section 30B requires an annual remuneration report (Report). The Report must disclose the total remuneration of each director and prescribed officer.
Public comment on proposed JSE amendments that align the Listings Requirements with the new framework closed on 26 June 2026. Previously, unlisted public companies largely set their own standards for disclosure.
Meanwhile, listed companies operated under the non-binding King V Code on Corporate Governance (King V) and JSE requirements. That position has now changed. Consequently, companies are beginning to consider the specific implications of the new approval regime introduced by the Amended Companies Act.
Policy and report – keep them separate
Although section 30A requires all public and state-owned companies to prepare a Policy and present it for shareholder approval by ordinary resolution, it does not prescribe the Policy’s contents.
By contrast, section 30B provides more detailed guidance on the Report. It also requires the Report to include at least a background statement, a copy of the Policy and an implementation report.
Among other things, the implementation report must disclose the total remuneration received by each director and prescribed officer. It must also disclose the remuneration of the highest-paid and lowest-paid employees. This distinction has practical implications.
The newly inserted section 30(4A) states that auditors must exclude the Policy and the Report’s background statement from any audit of the Report. The Policy is a prospective and strategic document with a three-year approval cycle.
By contrast, the Report is a retrospective factual disclosure that shareholders approve annually. Therefore, verifiable financial details should not appear in a document that the legislature has deliberately excluded from audit. In addition, a Policy that focuses on principles, frameworks, performance metrics and strategic intent is more likely to remain stable throughout its approval cycle. It also allows shareholders to assess the Report against transparent criteria.
The consequences of a rejected remuneration policy
Under the previous regime, shareholders could vote against a remuneration report. However, companies could ignore those votes. That is no longer an option. Section 30A(2)(a) states that shareholders must reconsider a rejected Policy at the next annual general meeting (AGM) or at a shareholders’ meeting called for that purpose. However, the section provides no further guidance. It does not address the interim validity of a rejected Policy. It also does not clarify the validity of decisions or actions taken under that Policy.
Furthermore, it remains silent on any liability that may arise if the board continues to act under a rejected Policy. This differs from the treatment of a rejected Report. In that case, section 30B sets out specific consequences. These include requiring members of the remuneration committee to stand for re-election. Therefore, the legal consequences of rejecting a Policy remain an open question. However, the practical and consequential risks are much clearer.
Section 30B requires companies to include a copy of the Policy in the Report presented for annual shareholder approval. If shareholders previously rejected the Policy, they are also more likely to reject the Report that implements it. That outcome would trigger the two-strike mechanism introduced by sections 30B(4) and 30B(5).
Boards must therefore prepare for a subsequent AGM without certainty that shareholders will approve the new Report. If they reject it, members of the remuneration committee must stand for re-election to the board. They are also excluded from committee membership. Consequently, boards should consider these outcomes when preparing for the relevant AGM, especially if they anticipate a second consecutive rejection.
These governance changes highlight another important implication of the Amended Companies Act.
Group companies and remuneration governance
A final question has emerged regarding sections 30A and 30B. The provisions do not explain how they apply to group companies. A public holding company may employ very few people directly. Meanwhile, operational subsidiaries often employ executive management and the wider workforce. As a result, an inconsistency may arise.
The holding company must table a Policy and Report for shareholder approval. However, the most significant remuneration arrangements may exist only at the subsidiary level. If the subsidiary is a private company, the statutory provisions would not apply to it.
Nevertheless, sections 30(4) and 30(5) extend certain reporting duties to some private companies through the public interest score. Those provisions still require certain remuneration-related disclosures in the financial statements. The proposed amendments to the JSE Requirements do not appear to address this issue. However, listed companies remain subject to King V, which indirectly addresses the omission.
Compliance with King V’s principles and its Disclosure Framework would not allow a listed holding company to exclude subsidiaries entirely when preparing its Policies and Reports.
This remains true even if the Companies Act technically permits it. Nonetheless, some uncertainty remains because King V follows an “apply and explain” approach. Its recommendations are also less prescriptive. As a result, listed companies must decide, with reference to King V, how their Policies and Reports should explain group-wide remuneration governance.
This includes explaining where key executives are employed and how the board assessed governance principles across the group. These issues will likely receive greater attention as organisations continue implementing the Amended Companies Act.
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| Helena Stoop | Senior Knowledge Manager | mail me | | Kevin Trudgeon | Director | mail me | |
| | Werksmans Attorneys | | |
