New law to force companies to reveal wage gap between highest- and lowest-paid
Government will publish the newly approved draft Companies Amendment Bill for public comment on Friday 1 October.
The Department of Trade, Industry and Competition (DTIC) says the redrafted 2021 version contains significant amendments.
The draft bill emphasizes transparency about the wage differences between a company's lowest- and highest-paid earners.
The raft of amendments has three inter-related policy objectives:
- improving ease of doing business in respect of certain provisions of the Companies Act;
- providing for greater transparency on wage ratios at firm level and;
- addressing true or beneficial ownership of companies, to address money laundering challenges.
Following the virtual Cabinet Meeting's approval of the publication of the Companies Amendment Bill of 2021 for public comment, the dtic will publish the Draft Companies Amendment Bill for public comment on Friday, 01 October #dtic— @SAgovnews (@SAgovnews) September 29, 2021
Bruce Whitfield interviews Andrew Woodburn, Managing Director of Amrop Woodburn Mann.
Woodburn notes that people generally don't like to disclose what they earn.
On a lighter note, I've never met anybody, at any level, who thinks they're overpaid.Andrew Woodburn, MD - Amrop Woodburn Mann
We know of course that senior executives are paid significantly more than their workers lower down in the hierarchy, and that's true anywhere in the world. We're not here to fight that.Andrew Woodburn, MD - Amrop Woodburn Mann
In terms of the statistics that are being published, the median of the [top] CEO pay on the JSE is in the region of R5.17 million and the median of lower workers across the country is in the region per year of R282,000Andrew Woodburn, MD - Amrop Woodburn Mann
Woodburn says compared to previous years, the gap is being narrowed.
The real issue though is that usually at the high end it is an individual like a CEO, with the optics are orientated to capitalism or the free market.
At the same time the lower level workers are labelled or grouped in a way that has a more socialist optic where everybody should be equal.
So you can see the complexity of trying to compare these two numbers.Andrew Woodburn, MD - Amrop Woodburn Mann
Woodburn says many company boards are already using the wage gap as a reasonable indicator.
The question is whether it is worth legislating or whether this would lead to further conflict.
Listen to Woodburn discussing the pros and cons on The Money Show:
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