Female executive directors of the Johannesburg Stock Exchange (JSE)-listed tech companies featured in the top 100 earn an average of 11% less than their male counterparts.
This is one of the key findings of the newly-released14th edition of the Executive Directors Practices and Remuneration Trends report compiled by PwC.
The report provides an analysis of various business trends dominating the top 100 JSE-listed companies, covering the period from 1 March 2021 to 28 February 2022. These trends include executive directors’ remuneration; environmental, social and governance (ESG);diversity and inclusion;human resources; as well as regulatory compliance.
According to the report, only 15% (84 women) of the JSE-listed firms’ executive population is female (including CEOs and CFOs). This is slightly improved from last year, where 13% of the overall JSE executive population was female. Female representation at CEO and CFO level alone is 8% (22 women) and 22% (56 women), respectively.
In terms of the gender pay gap, the report notes female executive directors of JSE-listed technology and telecoms companies in the top 100 are among the highest paid, compared to their female counterparts in other sectors.
Despite the gender pay gap slowly narrowing across the ICT sector, women remain woefully underpaid across other sectors, it notes.
Executive directors of companies in the consumer sectors show the lowest average pay gap of 4%, while the average pay gap in telecoms is 7%, technology shows an 11% gap, followed by healthcare with 35%.
When measured on a median basis (middle value in a set of data), the consumer discretionary sector shows the highest pay gap of 45%, followed by real estate (27%) and financial (25%), with the industrial sector showing the lowest margin at 9%.
“For more than 10 years, we have written about the importance and value of female representation in senior management and executive positions, and yet disappointingly, our research shows that minimal progress has been made over this period of time,” says Leila Ebrahim, report editor and co-lead for PwC Reward, People & Organisation.
“Boards today are conscious of the requirement for fair and equitable pay at all levels of employment throughout the organisation and have, for the most part, accepted their responsibilities in this regard. Yet, 28 years after democracy, South Africa is often cited as the most unequal society in the world, with a Gini coefficient of 0.6526.
“Beyond this, the South African median gender pay gap ranges between 23% and 35%, a figure higher than the average global gender pay gap of approximately 20%.”
A recent survey conducted by global recruitment firm Hired found that men in the technology field across the globe earned a higher pay cheque than their female counterparts 59% of the time for same position. It further points out that female candidates for tech jobs received wages 3% lower than their male counterparts.
Women leaders in SA’s data centre industry recently told ITWeb that there has been an increase in the number of women taking up technical roles within the data centre industry, with the gender pay gap slowly narrowing.
Across the JSE, there were, from January 2020 till June 2022, 208 new appointments into executive positions. Of these, 53 (representing 25%) were female, notes the report.
It further shows that, as at the cut-off date, only seven of the top 100 JSE-listed companies (8%, up from 5% last year) are led by female CEOs, and the representation of female CFOs is 19% (compared to 17% last year). Over the entire executive population of all JSE-listed companies, 15% is female (versus 13% last year).
“While the world experiences what has been coined the ‘great resignation’, within SA we are also contending with the reality that many highly-skilled employees are leaving their jobs for opportunities abroad (also referred to as the ‘brain drain’). This has an inevitable effect on pay levels,” Ebrahim states.
Linking ESG and pay
There is increasing pressure for companies to incorporate ESG metrics into their incentive structures. Of the top 40 listed companies, only three did not show evidence of ESG metrics in their short-term incentive, says PwC.
Public pressure and changing norms are paving the way for business leaders to be paid based on a new set of criteria.
While the global focus on ESG has related mainly to environmental considerations, in SA, social considerations play a bigger role, with income inequality being a primary consideration. Governance measures are less observed, only being used by a small number of companies.
“Listed and unlisted South African companies may not currently be subject to the same level of reporting scrutiny and responsibility as their global counterparts, but in the midst of potential regulatory changes, this may not remain the case for much longer.
“It is clear that the incorporation of ESG metrics into incentive structures is inevitable, with JSE-listed companies closely echoing the global trend,” says the report.
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