Sibanye Stillwater’s CEO Neal Froneman’s R300-million-plus-change pay package last year was a flashpoint that had trade unions seeing red. 

South Africa is the most unequal country in the world, and the level of executive pay against the backdrop of such glaring disparities remains a thorny issue. 

Last year, Froneman defended his remuneration on the grounds that it was mostly share-based, making it a cost to shareholders and not the company, and that it reflected the group’s performance since it began life as a Gold Fields spin-off in 2013. 

Read more in Daily Maverick: Sibanye CEO Froneman explains R300m remuneration package 

That performance has certainly been impressive, and Froneman has guided the company through its profitable diversification into platinum group metals (PGM) and the promising battery metals space. At R112-billion, the company’s market capitalisation is over 10 times what it was at its starting point. 

“… in addition to the significant capital growth, we have returned over R41-billion in additional value to investors in the form of dividends and share buybacks – just over four times our initial market capitalisation on listing,” the company said in its latest annual report. 

Sibanye’s profits fell last year to R19-billion from a record R33.8-billion the year before – a slightly steeper drop than the fall in Froneman’s pay for the year.

But the company maintains it has been narrowing wage and salary disparities within the group, which it says are not as wide as the industry average or the national average across all industries. 

It has applied the Gini coefficient – the global benchmark for measuring income distribution within a country or organisation – in which nil signals perfect equality, while 1 indicates that one person has hoarded all the cash. 

“… the Gini coefficient based on total remuneration improved from 0.37 in 2021 to 0.35 in 2022. The Gini coefficient for the Group is lower than that applied to REMChannel® data, which indicates Gini coefficients of 0.40 for the mining industry and 0.45 for all industries nationwide,” the company said.

“This is showcased in the reduction of the number of employees earning below R250,000, from 67% in 2019 to 14% in 2022, with a similar increase in the number of employees earning between R250,000 to R500,000, from 20% in 2019 to 69% in 2022. This illustrates the progress in our commitment to ensure dignified pay for all levels of employment, particularly at union level.” 

Something that was clearly at play last year was that top executives had pay cuts – CFO Charl Keyter’s total remuneration fell to R85.5-million in 2022 from R147-million in 2021 – while the unionised workforce had pay hikes roughly in line with inflation. So, a more equitable reading of the Gini coefficient would be expected. 

The bottom line is that Froneman is still making lots of money, but Sibanye’s workforce is also receiving a growing share of the company’s revenue, while shareholders have coined it over the years. And while unions will almost certainly criticise Froneman’s pay, the company has multiyear wage agreements locked up at its gold and PGM operations.

But in the context of a cost-of-living crisis, especially for lower-income South Africans, this will spark a legitimate public debate. DM/BM