Abstract
Purpose: Given South Africa’s well-developed governance framework, considerable wage inequality and sizeable executive packages, this study was conducted to reflect on the aptness and application of the King IV director remuneration guidelines.
Design: The views of 23 representatives of institutional investors, remuneration committee members and leading executives of financial services companies were gauged on the King IV remuneration recommendations by conducting semi-structured interviews. The primary data were analysed by conducting thematic analysis.
Findings: The participants commended the heightened focus on pay-related transparency and reporting quality evident in King IV, in particular the three-part remuneration report and single pay figure disclosure. Participants urged remuneration committees to link executive pay to the six capitals.
Practical implications: Government and the Institute of Directors in South Africa should account for the considerable regulatory burden that companies are experiencing when amending remuneration-related regulation in future. More guidance is required to link sustainability considerations to executive emolument. A corporate culture which promotes fair remuneration would benefit multiple stakeholders. Focus should be placed on equal pay for work of equal value.
Value: The views of powerful and informed stakeholder representatives were gauged on responsible and transparent remuneration practices in an emerging market with severe pay inequality.
Disclosure statement
No potential conflict of interest was reported by the authors.