Capitec CEO Gerrie Fourie took an effective 33% pay cut during the bank’s past financial year but still raked in more money over the 12-month period than most South Africans will make in their entire lifetimes.
The head of SA’s largest retail bank by customer numbers earned R62.09m during Capitec’s financial year to end-February, according to remuneration details contained in the group’s 2023 integrated annual report. That amount comprised guaranteed pay of R16m, benefits of R920,000, short-term incentives of R5.43m and long-term incentives of R39.74m.
That compares to the typical South African’s average monthly earnings of about R26,032 — or R312,384 a year — based on Stats SA’s quarterly employment statistics for the fourth quarter of 2022. That implies Fourie earns an annual salary that is almost 200 times greater than that of the average employed South African.
Ironically, Fourie’s remuneration for Capitec’s 2023 financial year was significantly lower than the R92.77m he earned the previous financial year. That amount comprised R14.67m in guaranteed pay, benefits of R99,000, short-term incentives of R8.31m and long-term incentives of R69.69m.
“Corporate SA refuses to disclose wage gaps, which have a bigger impact on overall inequality than unemployment, but expects shareholders to believe that executive compensation is fair and responsible,” said Tracey Davies, executive director of shareholder activist group Just Share. “It is evident from the increasing number of shareholders voting against remuneration packages that they do not buy this, and do not consider remuneration to be rationally linked to performance.”
Capitec said in its annual report that it had “proactively” engaged with several of its larger institutional investors ahead of its AGM in May 2022 to discuss its remuneration policy and implementation report. It said these reports subsequently resulted in it receiving 79.08% and 52.54% approval from shareholders respectively at the AGM.
“We see our remuneration policy as key to our ability to attract and retain talent in a market where the battle for talent is fierce,” Danie Meintjes, who chairs Capitec’s remuneration committee, wrote in the report. “We have engaged independent external remuneration consultants to ensure that our remuneration policy remains fit for purpose in a dynamic and changing environment and is aligned to the achievement of our strategies.”
However, Davies was unimpressed.
“Remuneration committees, most of whose members are themselves highly paid executives, receive advice from remuneration consultants, who have a vested interest in ensuring that executive pay goes up every year so that they continue to be retained as advisers,” she said. “The system around setting executive remuneration is designed and operated by its beneficiaries, and until regulatory intervention changes this, or institutional investors have the courage to vote remuneration committee chairs off the board, nothing will change.”
Remuneration details in Capitec’s annual report showed former CFO and co-founder Andre du Plessis, whose retirement became effective at end-June 2022, earned R31.05m in the 2023 financial year, though that number contained no short-term incentives due to his retirement.
Grant Hardy, who has taken over as CFO from Du Plessis, earned R6.97m for the 12-months to end-February 2023. That comprised R4.67m in guaranteed pay, R46,000 in benefits, R1.56m in short-term benefits and R694,000 in long-term incentives.
Capitec chair Santie Botha also received a bumper payday, earning R4.39m in 2023 financial year, 35% more than she earned in 2022. Botha also chairs the boards of fast-food group Famous Brands and private education provider Curro Holdings, arguably making her the busiest board leader in corporate SA.
Capitec’s annual report showed its total employee remuneration and benefits (excluding unemployment insurance fund contributions and skills development levies) fell to R6.1bn in the 2023 financial year. That is almost 18% less than the R7.4bn it spent on total employee remuneration in the 2022 financial year, even though its total employee numbers rose to 15,451 in 2023 from 14,758 in 2022.
If the R6.1bn Capitec spent on remuneration in the year to end-February 2023 is spread out across its 15,451 employees, one gets an average salary of R394,796, which is about 26% higher than the average SA salary of R312,384. However, if one conducts a similar exercise using Capitec’s 2022 employment data, one arrives at an average salary of R501,422.
Capitec’s annual report also shows that the average increase in total guaranteed pay (TGP) across all employees was 5.75% for the 2023 financial year. In 2022 the average TGP increase awarded to all employees was 4.6%.
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