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 amendments to the Companies Act that came into force on 22 May 2026, those ratios, and the full remuneration of every director and prescribed officer at public and state-owned companies, must now be disclosed in an annual report submitted for binding shareholder approval. For the first time, a vote against that report has real consequences.
Sections 30A and 30B of the Companies Act are now in force. Section 30A requires companies to prepare a remuneration policy (Policy) and submit it for shareholder approval by ordinary resolution. Section 30B requires an annual remuneration report (Report) disclosing total remuneration of each director and prescribed officer. Public comment on proposed JSE amendments to align its Listings Requirements with the new framework closed on 26 June 2026. Previously, unlisted public companies largely set their own disclosure standards; listed companies operated under non-binding King V Code on Corporate Governance (King V) and JSE requirements. That has now changed and companies are starting to consider the specific implications of the new approval regime.
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, the section does not prescribe the contents of the Policy. In contrast, section 30B sets out more detailed guidance regarding the Report and stipulates that it must comprise at least a background statement; a copy of the Policy; and an implementation report containing, among other things, the total remuneration received by each director and prescribed officer and the remuneration of the highest and lowest paid employees.
The distinction has practical implications. The newly inserted section 30(4A) provides that where any provisions of the Report are subjected to audit, the Policy, and the Report’s background statement, must be excluded from that audit. The Policy is a prospective, strategic document with a three-year approval cycle; the Report is a retrospective factual disclosure approved annually. Verifiable financial details should not find their way into a document that the legislature has sensibly excluded from audit. A Policy confined to principles, frameworks, performance metrics and strategic intent is also more likely to remain stable across its approval cycle and to allow 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 and companies could and did, ignore them. That is no longer an option. Section 30A(2)(a) provides that a Policy that is rejected by shareholders must be presented at the next annual general meeting (AGM) or at a shareholders’ meeting called for that purpose. The section offers no guidance beyond this requirement and does not address the interim validity of a rejected Policy, the validity of decisions or actions taken on the basis of a rejected Policy, or the liability, if any, that could follow where the board continues to act on the basis of a rejected Policy. This stands in contrast to the instances where a Report is rejected, in which case section 30B sets out more specific consequences, including the requirement that members of the remuneration committee must stand for re-election.
The legal consequences that might follow the rejection of a Policy therefore remains a somewhat open question. The consequential and practical risks associated with a rejected Policy are more apparent. Section 30B requires a copy of the Policy to form part of the Report that must be presented for approval annually. Prior rejection of the Policy would be a strong indication that shareholders are likely also to reject the Report that gives effect to it. This would trigger the two-strike mechanism introduced by section 30B(4) and (5). Boards must prepare for a subsequent AGM without absolute certainty that the newly tabled Report will be approved, in which case members of the remuneration committee would have to stand for re-election to the board and are excluded from committee membership. Where there is any indication that a Report might be rejected for a second consecutive year, these eventualities would have to be taken into account when preparing for the relevant AGM.
Group companies and remuneration governance
A final question that has been raised in connection with sections 30A and 30B relates to the fact that the provisions do not address their application to group companies. Where a public holding company has limited employees of its own, while executive management and the broader workforce are employed by operational subsidiaries, an incongruity could arise: the holding company is required to table a Policy and Report for shareholder approval even though the economically significant remuneration arrangements exist at subsidiary level. If the subsidiary is a private company, it would not be subject to the statutory provisions at all. However, the reporting duties of sections 30(4) and 30(5), which extend to some private companies by means of the public interest score, would still require certain remuneration-related disclosures in the financial statements.
Proposed amendments to the JSE Requirements appear not to address this issue. However, listed companies remain subject to King V, which indirectly addresses the omission. Compliance with King V’s principles and the disclosures required by its Disclosure Framework would not permit a listed holding company to entirely exclude subsidiaries when preparing its Policies and Reports, even where the Companies Act technically allows this. Nonetheless, given the discretion inherent in King V’s apply and explain regime, and the fact that its recommendations are less prescriptively set out, some uncertainty remains. Listed companies would have to determine for themselves (with reference to King V) how their Policies and Reports should explain group-wide remuneration governance, including where key executives are employed and how the board has assessed relevant governance principles across the group.
Written by Kevin Trudgeon Director and Helena Stoop, Senior Knowledge Manager at Werksmans Attorneys