Activist group Just Share has dismissed Woolworths’ new staff healthcare benefits as insufficient, saying the initiative, while important, does not make employee pay fair or reasonable.
This criticism reignites scrutiny over SA’s extreme wage inequality and raises fresh questions about whether retailers are doing enough to close the gap between top executives and frontline workers.
The retailer rolled out a first-of-its-kind employee benefits package that gives more than 24,000 frontline workers access to private healthcare. The benefits, announced last week, include access to doctors, dentists, optometrists, chronic and acute medication, and funeral and disability cover through the Momentum Health4Me Gold plan. It is the first time many Woolworths store and distribution centre workers have had access to private medical care.
The company said the new benefits reflect its commitment to employee wellbeing and are part of a broader “Just Life” initiative, which also includes its R120m “Just Wage” programme to raise minimum salaries. The company pays a minimum hourly rate of R45, which it says is 56% above the national minimum wage.
But Just Share, which last year revealed Woolworths had the highest CEO-to-worker pay gap in the retail sector, said the core issue of extreme wage inequality remains unaddressed.
“The Just Wage initiative is commendable and Woolworth’s pays its employees more than some of its competitors. But the question to ask is whether the minimum wage that Woolworths’ pays its staff is sufficient to allow them to afford a decent standard of living, including schooling, transport, food, utilities etc,” Just Share said.
In its 2024 analysis, Just Share found that Woolworths’ CEO earned 1,308 times more than the company’s lowest-paid worker. CEO Roy Bagattini took home R122.5m in the 2023 financial year. That’s the equivalent of more than R10m a month, compared to about R8,000 a month for the lowest earners.
Woolworths is not alone. Just Share found that, on average, CEOs in the retail and wholesale sector earn 597 times more than the lowest-paid workers. Entry-level employees would need to work 21 months to earn what a typical retail CEO earns in just one day.
While Woolworths has raised its internal wage floor and introduced new benefits, it has yet to disclose its vertical pay ratios, a requirement required by the Companies Amendment Act of 2024.
“The excessive pay of Woolworth’s CEO has attracted much comment in recent years, with 53.5% of shareholders voting against the remuneration policy in 2023.
“When the lowest-paid worker is earning at most around R8,000 a month, and the CEO the equivalent of around R5.5m a month in 2024, and over R10m a month in 2023, there are fundamental questions of equity at play. Woolworth also still does not disclose its vertical pay gaps despite the imminent implementation of sections 30A and 30B the of Companies Amendment Act.”
While the act forces public companies to disclose the ratio between the highest and lowest earners, gender pay gap disclosures were excluded from the final legislation.
The upcoming King V governance code also calls for fairness to be built into remuneration design, putting more pressure on boards to address internal equity.
“Remuneration disclosures that put wage gaps into context, such as the impending disclosure requirements in the Companies Amendment Act, are a much more accurate reflection of whether a company is actually committed to a fair and just approach to remuneration than slogans and catch-phrases.”
With other retailers like Shoprite and Mr Price also facing similar inequality gaps, the pressure is now on the broader sector to follow suit, and for boards to decide whether this kind of pay structure is defensible in a country battling extreme inequality.
“Ultimately, the fairness of remuneration at these retailers must be assessed both in principle and in practice. It requires a balance between internal wage dynamics and broader societal expectations in a highly unequal context like SA. Companies must not only disclose their internal pay gaps but also demonstrate how they are actively addressing them through transparent, progressive, and just remuneration practices.”
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