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MIND THE GAP

Pay-gap disclosure: Old Mutual’s annual minimum salary is R180,000, CEO takes home R32.3-million

Old Mutual raises minimum salary to R180,000 a year, proudly claiming to bridge the wage gap in the financial services sector, with chairman Trevor Manuel hailing the move as a step towards fairer pay practices.
Pay-gap disclosure: Old Mutual’s annual minimum salary is R180,000, CEO takes home R32.3-million Old Mutual CEO Iain Williamson. (Photo supplied)
Neesa Moodley
By Neesa Moodley
27 Mar 2024
Facebook
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Old Mutual says it has managed to increase the minimum salary of employees to R180,000 a year or R15,000 a month, and claims to be the first insurer to do so. “We are among the first companies in the financial services sector to take a decisive step towards narrowing the wage gap and one of the first to provide voluntary disclosure in our remuneration report,” chairman Trevor Manuel writes in the company’s annual integrated report for 2023.

The R15,000 a month minimum salary applies to those employees on a permanent total guaranteed package. To put it in perspective, Standard Bank’s minimum cost-to-company salary in 2023 was R231,050 (R19,254 a month).

Trevor Manuel delivers his keynote address at The Gathering Twenty Twenty-Four held at the Cape Town International Convention Centre on 14 March 2024. (Photo: Shelley Christians)
Old Mutual chairman Trevor Manuel delivers his keynote address at the Gathering Twenty Twenty-Four held at the Cape Town International Convention Centre on 14 March, 2024. (Photo: Shelley Christians)

Financial union, Sasbo said Old Mutual has committed to no future new appointments below the R180,000 minimum pay level. The increase reflects an increase on total spend by Old Mutual of 6.8% on the guaranteed remuneration bill for the bargaining unit as of 1 April 2023. Sasbo commended Old Mutual for pay rises between 6.2% and 10% and significantly improved salaries for those previously earning less than the R180,000 annual minimum salary.

Old Mutual’s remuneration committee chairperson, Itumeleng Kgaboesele says the financial services giant adjusted salaries to ensure no employee was below the minimum payline for the category of work carried out. “This change was effective April 2023, having a positive impact on our pay ratios. Approximately 55% of the fair pay spend benefited female employees with just under 90% benefiting previously disadvantaged groups of employees. During the year, we investigated the minimum salaries for the rest of our markets across Africa and found that we pay well above any legislated minimums,” he said. Around 94% of the benefit supported employees in junior roles.

Chief executive Iain Williamson’s annual total guaranteed package is R10.3-million a year. If you weigh that against the minimum salary of R180,000 a year, the pay ratio multiple is 57, which means he earns 57x the minimum company salary.

However, once short-term incentives, long-term incentives and qualifying dividends are accounted for, his annual package works out to R32.33-million for the 2023 financial year — moving the pay ratio multiple to 180.

Just Share notes that Old Mutual uses the approach proposed in the Companies Amendment Bill, which requires companies to disclose “the remuneration gap reflecting the ratio between the total remuneration of the top 5% highest paid employees and the total remuneration of the bottom 5% lowest paid employees of the company”.

“Pay gap disclosures are necessary and important as they provide crucial insights into labour market inequality, and steer informed conversations and a broader understanding of the state of pay disparities and the options available to reduce inequality. This increased transparency also empowers investors to make informed decisions when exercising their voting rights on remuneration policy and implementation reports. It is encouraging to see that several JSE-listed companies have decided voluntarily to make these disclosures,” Just Share says.

However, the non-profit shareholder activism organisation says going forward, such disclosures should include:

  • more detail about the roles of the employees to whom the disclosed minimum salaries apply; and
  • the number of contract workers to whom these disclosures do not apply, and the types of jobs that they perform. DM

Comments (10)

Jane Crankshaw Mar 28, 2024, 06:42 AM

Minimum salary of R15000 a month - before tax? Ones Domestic earns that! Not something to be proud of Old Mutual! IMHO this sort of justification is thanks to BEE policies - instead of employing people with experience and knowledge, companies are employing novices which justifies paying a pittance with no concern about service levels delivered to the clients!

tshiggo Mar 28, 2024, 07:42 AM

I suspect you'll not find too many domestic workers earning R15,000 p.m. As such, OM paying these salaries for cleaning staff is well above the average. To add some context, a teacher with 30 years experience who works long hours and weekends marking your kids work earns less than R25,000.

Jennifer D Mar 28, 2024, 08:16 AM

That teachers are paid so poorly has never made any sense to me. It originates in the times that people had “causes” and were dedicated to the roles beyond the salary. Like doctors were. They would come out at night to ones home. Now, the schedule your surgery (whether you need it or not) in their booking log to make sure they have no gaps in their diary and that their financial interest in the hospital is accommodated with bums in beds. It’s a shame - commitment to the greater good is down the drain.

cwf5108@gmail.com Mar 28, 2024, 03:08 PM

Tim, If I remember correctly, both the Cleaning Services as well as Security Services as well as the "Gardening Services" at OM are all outsourced to different companies, so they are not included in this minimum wage decision. I think that this scandalous minimum wage is for OM's permanent staff only, i.e. possibly matriculants of last year who starts out afresh with no experience. At the same time, all of OM's actuarial students, starts at Level 7 (assistant divisional manager - ADM) and once they qualify as actuaries, they are automatically promoted to Level 5 (highest ADM level) so that they can purchase their Porsche Boxster in 6 payments, such is the jump between those 2 Levels. 'Nuff said.

cwf5108@gmail.com Mar 28, 2024, 03:08 PM

Tim, If I remember correctly, both the Cleaning Services as well as Security Services as well as the "Gardening Services" at OM are all outsourced to different companies, so they are not included in this minimum wage decision. I think that this scandalous minimum wage is for OM's permanent staff only, i.e. possibly matriculants of last year who starts out afresh with no experience. At the same time, all of OM's actuarial students, starts at Level 7 (assistant divisional manager - ADM) and once they qualify as actuaries, they are automatically promoted to Level 5 (highest ADM level) so that they can purchase their Porsche Boxster in 6 payments, such is the jump between those 2 Levels. 'Nuff said.

Brian Hutton Mar 28, 2024, 08:29 AM

It is obscene that the top brass can earn so much money in a year. I wonder how much tax they pay after the‘creative’ accounting is applied.

Beyond Fedup Mar 28, 2024, 08:58 AM

Oh horror of horrors! A much maligned and vilified white male in SA, earning this type of money in this day and age! What a calamity. Of course if it was a black male or a "previously disadvantaged" one like the odious Iqbal Surve, then all is hunkey dory. Back to the drawing board - the National Democratic Revenge, oops Revolution is failing the country!

virginia crawford Mar 28, 2024, 11:36 AM

Ideology blinds you, Beyond. Does his salary sound reasonable to you?

Geoff Krige Mar 28, 2024, 09:08 AM

First, the CEO earns basic salary plus bonuses. To quote the 57x ratio based on basic salary is deliberately misleading. The ratio is 180x. In other words, the CEO earns in less than 3 months what the lowest paid worker earns in a 40 year working lifetime. To go from an "over-the-top, ridiculously excessive" ratio to a "ridiculously excessive" ratio is nothing to boast about. Second, one wonders what is "out-sourced". It is common knowledge that many companies "improve" the pay ratio by out-sourcing the lower paid workers. So cleaners, security staff, temporary workers and others are conveniently excluded from the pay ratio because they do not officially work for the company. What is the Old Mutual pay ratio if it is calculated on the basis of all persons who work for Old Mutual, whether directly on Old Mutual payroll or employed via a labour broker or service company?

Geoff Krige Mar 28, 2024, 09:08 AM

First, the CEO earns basic salary plus bonuses. To quote the 57x ratio based on basic salary is deliberately misleading. The ratio is 180x. In other words, the CEO earns in less than 3 months what the lowest paid worker earns in a 40 year working lifetime. To go from an "over-the-top, ridiculously excessive" ratio to a "ridiculously excessive" ratio is nothing to boast about. Second, one wonders what is "out-sourced". It is common knowledge that many companies "improve" the pay ratio by out-sourcing the lower paid workers. So cleaners, security staff, temporary workers and others are conveniently excluded from the pay ratio because they do not officially work for the company. What is the Old Mutual pay ratio if it is calculated on the basis of all persons who work for Old Mutual, whether directly on Old Mutual payroll or employed via a labour broker or service company?

megapode Mar 28, 2024, 09:19 AM

What's remarkable is that this is news. The implictation is that a lot of people, in regular employ, who are honest and industrious, are taking home a lot less money. Notionally we are all concerned about poverty. The best way to beat poverty is not to do away with minium wage which will, theoretically, open up the job market (for jobs at slightly above R0 per hour), but to to pay a decent wage. The CEO's package is no doubt bench marked against best international practices blah blah. A pity nobody does the same benchmarking for the janitorial staff (who are probably outsourced and thus none of Old Mutual's concern) and the receptionists.

virginia crawford Mar 28, 2024, 11:37 AM

Or benchmark the service levels or anything else.

Annemarie Hendrikz Mar 28, 2024, 10:11 AM

For another perspective - although in agreement with the critical comments on this disparity - the next time you shop at woolies (if you do), bear in mind that their CEO earns very very much more than this old mutual fellow and the cashier who serves you earns very very much less than the old mutual minimum.

Simon Sephton Mar 28, 2024, 11:41 AM

I have long held that there ought to be tax incentives for a) full and transparent disclosure of pay gaps, including information that unmasks common hiding places (like contract workers); and b) meeting particular low-ratio targets, adjusted according to the size and nature of a business. OM's boast is a tad hollow, but is a move in the right direction: if there were more transparency on this score, and competition between top companies vying for the public's business, then real remuneration reform would be far more likely achieved.

Greeff Kotzé Mar 29, 2024, 02:18 PM

Yes! Our personal income tax has brackets, why not company taxes? But the criteria should differ: the more a company contributes to societal problems (such as huge income inequality) that government has to spend money on trying to fix (whether that actually happens is a separate argument), the more that company should contribute in the form of taxes. Why should we carry the burden so that they (and their top structure) can keep leeching?

Beyond Fedup Mar 28, 2024, 11:12 PM

Hi Virginia. What ideology am I blinded by? That is the way of the world whether it is right or wrong. Is Motsepe’s wealth more acceptable as he is not a vilified white male in this country.

virginia crawford Mar 29, 2024, 07:37 AM

The fact that he is a white man is not the issue. Many people are over-paid in S.A., especially in government. Bringing race into it seems like race is the issue: that's ideological.

dalamba127 Mar 29, 2024, 09:09 AM

This.

Kenneth FAKUDE Mar 30, 2024, 01:15 PM

This Virginia is always the case when people read comments with an agenda in mind, forgive them they are hostages of their race prison whilst we enjoy the fruits of diversity.

Kid Charlemagne Mar 29, 2024, 12:39 PM

For an organisation of OM size and resources, missteps made over the years are mind-boggling. I see they're again trying to venture into the banking space with the launch of Old Mutual Bank. This, despite ridding itself of Nedbank in recent years and the feeble attempt at a bank launch sometime after demutualisation many forget. OM is not sufficiently agile and progressive to unlock its embedded value some may believe it has. Just look at its share price, woeful!