Absa has increased its minimum pay to R20,833 a month, becoming the latest lender to reveal what it pays to its lowly paid staffers.
The lender in its 2024 annual published on Tuesday said it was now paying a minimum wage of R250,000 a year, saying it continued to focus on ensuring that minimum remuneration levels in all of its markets are appropriate.
“In 2024, we applied a minimum cost to company level of R230,000, which is higher than the national minimum and living wage and is competitive relative to the disclosed minimum cost to company levels in our banking peer group,” it said.
“Our minimum annual cost to company in SA will increase to R250,000 (up 8.7%, greater than our overall bargaining unit salary increase) with effect from April 1.”
Standard Bank has raised its minimum wage to R258,000 a year, while Investec, based on its 2023 annual report, pays its SA employees a minimum salary of R250,000 a year.
Insurance firms Santam and Old Mutual pay a minimum R15,000 a month based on their latest disclosed remuneration data.
Old Mutual also introduced an “inclusive parental leave policy” with employees qualifying for a minimum of four months of fully paid parental leave across the group.
Absa said its ratio of 129:1 of the highest paid relative to the lowest paid employee reflects the material difference in the scope of the relevant roles. It said about three-quarters of the highest paid employees’ remuneration is variable remuneration (short- and long-term incentives).
“We are monitoring remuneration outcomes to ensure that these are fair and responsible when considering race, gender and role, confirming with management that steps are being taken, where appropriate, to address differentials that could not be explained on the basis of objective criteria,” the lender said.
“This includes reviewing outcomes of the upstream elements of the human capital value chain, such as performance management, given that this is a key input into pay-for-performance.”
The group’s acting CEO Charles Russon was paid fixed remuneration of R6.9m, and a total of R34.4m when including incentives, both short term and long term.
Russon led the recovery of the group in the second half of last year after the early retirement of Arrie Rautenbach. The bank has since appointed Standard Bank deputy CEO Kenny Fihla to the role of CEO, and he will take over the reins in June.
Absa CFO Deon Raju’s total pay came in at R22m, including fixed salary of R4.59m.
The group’s profit for the 2024 financial year grew 10% to R22.1bn, while its return on equity improved to 14.8% from 14.4% in the prior year.
However, the bank’s executives missed out on a windfall after the poor performance of the company’s share price.
“Despite a strong rally in Absa Group’s share price in the last quarter of 2024, our three-year total shareholder return underperformed our peers, resulting in a zero outcome on this measure,” it said.
The average CEO in the retail and wholesale sector earns 597 times more than the lowest-paid worker, according to a report by shareholder activism organisation Just Share.
The analysis, conducted across 10 JSE-listed companies, highlights the wage inequality between CEOs and the lowest-paid workers, as well as progress in board and management diversity.
The report looks at major players Shoprite, Pick n Pay, Pepkor, TFG, Woolworths, Mr Price, Dis-Chem, Clicks, Truworths and Spar. It says these companies collectively employ nearly 390,000 full-time employees and generate annual revenues of R833.7bn.
The average lowest-paid worker in the wholesale and retail sector would need to work for 21 months to earn what an average CEO in this sector earns in one day, Just Share said.
With Nompilo Goba
Correction: April 3 2025
In an earlier version of this story we said Deon Raju worked at Standard Bank when, in fact, he is with Absa.
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