King IV: The benchmark of corporate governance — Remuneration:
- Retainers are the most common means of fee payments for chairs and NEDs.
- Audit committee chairs are paid the highest average retainer among chairs of the three main committees (audit, remuneration, and nomination).
Fee structure for board members
Remuneration data for the 2023 South Africa Spencer Stuart Board Index is taken from the most recent annual reports, prior to our cut-off date of 31 May 2023.
- Retainers are the most common means of remunerating chairs and NEDs.
- Payment of committee attendance fees in addition to a retainer is infrequent (among our sample only 10.2% of companies had a retainer + committee attendance fee structure). This indicates a 27,8% decrease from a decade ago, when 38% of chairs were remunerated through retainer and committee attendance structures. Among NEDs, there has been a 36.8% decrease from a decade ago, when 47% of the cohort were remunerated through retainer and committee attendance structures.
Average Retainer Fees for Board of Directors (R000)
Note: The lead independent NED average retainer fee was not included in 2012
Chair
The average retainer paid to chairs is R5.1m, a 265% increase from R1.4m a decade ago. The growth in chair compensation across all sectors reflects the rising influence and complexity of the role, and the value of an experienced and effective chair.
Lead independent non-executive directors
- The average retainer for lead independent NEDs is R1.56m. It is interesting to note that lead directors are paid retainers that are on average almost two-thirds higher than those paid to an NED.
Non-executive directors
- The average retainer for NEDs has increased by 128% over the decade to R929,317 from R407,000, demonstrating that companies are spending more to keep attract and retain their directors.
Committee membership fees
A retainer is the most common means of remunerating committee chairs and members. Only 10.2% of the sample are paid attendance fees.
Fees by committee (‘000)
|
Chair retainer |
Non-executive director retainer |
|
2022 |
2012 |
2022 |
2012 |
| Audit |
R636 |
R208 |
R335 |
R97 |
| Remuneration |
R569 |
R140 |
R307 |
R84 |
| Nomination |
R553 |
n/a |
R304 |
n/a |
Nomination committees were not considered in 2012
Audit committee
- Audit committee chairs are paid an average retainer of R636,485, a 206% increase from R208,000 in 2012.
- Audit chairs are paid on 11.8% more than their remuneration and nomination counterparts.
Remuneration committee
- The average retainer paid to remuneration committee chairs is R569,465; NED members receive R307,000. This represents a 306% increase from 2012 for chairs, and a 266% increase for NEDs.
Nomination committees were not considered in 2012
Average and Range for Other Committees
Risk committee excludes audit and risk committees
ESG includes social and ethics and sustainability committees