S30B Remuneration Report

Remuneration Report to be Produced by Public Companies and State-Owned Companies
Addition of Section 30B of the Companies Act

Public Companies and State-Owned Companies (SOCs) are required to prepare an Annual Remuneration Report to be approved at each Annual General Meeting. The report must contain details of the highest-paid and lowest-paid employees, among other information.

Public Companies and SOCs must prepare an Annual Remuneration Report.
The report must include the Remuneration Policy, with an implementation report on the remuneration of each Director and prescribed officer, as well as the lowest-paid, highest-paid, and average employee remuneration.
The Remuneration Implementation Report should also include details of the average total remuneration of all employees, median remuneration of all employees, and the remuneration gap reflecting the ratio between the total remuneration of the top five percent highest-paid employees and the total remuneration of the bottom five percent lowest-paid employees of the company.
The report must be approved by ordinary resolution at the Annual General Meeting of a Public Company or SOC.
If the Remuneration Report is not approved at an Annual General Meeting, the Non-Executive Directors of the Remuneration Committee must explain the reasons at the next AGM, having considered the shareholders’ concerns.
The Non-Executive Directors, who are members of the Remuneration Committee and have served for more than 12 months during the year under review, must stand for re-election at an Annual General Meeting where an explanation is required for the purposes of a Remuneration Report that was declined at a previous AGM.
If the Remuneration Report is declined again at an AGM where an explanation was required, the Non-Executive Directors, who are members of the Remuneration Committee and have served for more than 12 months during the year under review, may be re-elected as Directors of the Public Company or SOC. However, they will not be permitted to serve on the Remuneration Committee for two years after such an AGM (referred to as the “two-strike rule”).

Prescribed Officers, as defined by the Companies Act and Companies Regulations, are typically those who hold C-suite positions, such as the CEO, COO, and CFO of companies, along with heads of business units. This includes any person who:

“regularly participates to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company; or
regularly participates to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company.”

The Companies Act Amendments 2024:

Pertinent changes were made to our South Africa Companies Act recently after the Companies Amendment Act 2024, No. 16 and the Companies Act Second Amendment, 2024 No. 17 were ascended into law on 25 July 2024.

The amended provisions are not yet operational and will come into effect after President Cyril Ramaphosa makes proclamation in the Gazette as to the effective date.

Statucor continues to unpack the amendments and the effect that they may have on our valued clients, and we look forward to publishing further communications on our observations in future. Click here for a full summary of all changes made to the Companies Act through the 2024 Amendments or view our News page for our latest articles on the Companies Act, Governance and Compliance matters that may be pertinent to you.