New bill aims to expose wage gaps in SA companies

The department of trade, industry and competition (Dtic) is calling for public comment on the recently released Companies Amendment Bill, which was published in Government Gazette 45250 on October 1.

The bill contains a number of significant changes to the Companies Act (Act 71 of 2008) and was drafted after extensive consultation with various parties including the Johannesburg Stock Exchange, the Banking Association of South Africa and the Independent Regulatory Board for Auditors.

One proposed change that has garnered public attention is the inclusion of provisions that will force companies to report the extent of their wage gap between their highest and lowest paid employees.

If passed, the bill will add a new section to the Act – Section 30A – which reads:

“A public company or state-owned company must prepare and present the remuneration policy for directors and prescribed officers for approval by ordinary resolution, at the annual general meeting.”

Included in this report must be the details of remuneration and benefits received by each director or prescribed officer as well as the total remuneration including salary, benefits, short-term incentives and long term incentives of both the highest and lowest paid employee.

The report must also include the average remuneration of all employees, the median remuneration and the gap between the top 5% highest paid employees and the bottom 5% lowest paid.

All reports will have to be approved by the company board, presented to shareholders at the annual general meeting and must be voted on by the shareholders for approval.

Public comment will remain open until the end of October. All comments can be emailed to companiesamendmentact@thedtic.gov.za for the attention of Mr Desmond Ramabulana or mailed to:

Director-General
Department of trade, industry and competition
Private Bag X84
Pretoria
0001

A copy of Government Gazette 45250 can be downloaded at the Government Printing Works website.