LINDIWE SEBESHO | Pay literacy — the competency SA cannot afford to get wrong

South Africa’s pay transparency debate has entered a decisive new phase, where disclosure is no longer simply a matter of governance maturity but of statutory accountability, investor scrutiny and organisational trust.

On May 22 sections 30A and 30B of the amended Companies Act became operational for public and state-owned companies whose AGMs fall within the new framework. Alongside this, King V, South Africa’s latest corporate governance code, frames fair, responsible and transparent remuneration as a clear board accountability issue.

Together the developments raise the stakes: companies must now table remuneration policies for shareholder approval every three years or whenever materially amended, and present annual remuneration reports at the AGM that include prescribed pay gap information.

The consequences are significant. If shareholders do not approve the annual remuneration report, the company must explain how their concerns were considered. If the report is rejected at two consecutive AGMs, nonexecutive directors on the remuneration committee face statutory consequences, subject to section 30B.

Remuneration governance has therefore moved beyond best practice into a matter with direct legal, investor and workforce consequences.

The proposed Fair Pay Bill would extend this trajectory by limiting salary history reliance, requiring pay ranges in job advertisements and protecting employees who discuss pay. It remains a bill, but its direction is clear. Globally, the EU Pay Transparency Directive is accelerating salary range disclosure, pay information rights, gender pay gap reporting and corrective action where unjustified gaps persist.

However, regulation can only open the door. It cannot help boards explain pay outcomes, managers hold credible pay conversations, or employees assess fairness. That requires pay literacy: the ability to understand how pay strategies are set, how decisions are made, what fair pay means, and how to engage with pay information in an informed rather than reactive way.

These disclosures will land in a country marked by severe inequality and weak labour market absorption. Stats SA’s second quarter 2026 Quarterly Labour Force Survey shows the official unemployment rate at 33.6%, with youth unemployment at 47.4%, underscoring how limited employment access shapes the public meaning of pay fairness.

Remchannel’s April 2026 Salary and Wage Movements Survey adds the workplace lens: average salary increases were 5.43%, nominally above inflation. However, in a labour market this constrained, even above-inflation increases do not automatically translate into financial security, with two-pot retirement withdrawals signalling pressure from living costs, emergencies and debt.

Read together, the labour market and wage data make the same point: pay disclosure will not land in a neutral environment.