South African boards face a new era of accountability following amendments to the Companies Act that came into effect on 22 May 2026, fundamentally reshaping how executive remuneration is governed and approved.
According to PwC’s latest report, The South African Executive Remuneration Landscape 2026: Strategic Insights for Leadership, the introduction of binding shareholder votes on remuneration policies and annual remuneration reports marks a significant shift in corporate governance.
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‘Shareholder approval’
Previously, shareholders could only cast advisory votes on executive pay. Under the new regime, all public and state-owned companies must obtain shareholder approval for both their remuneration policy and annual remuneration report.
If a remuneration report is rejected, members of the remuneration committee must stand for re-election at the next annual general meeting. A second consecutive failure disqualifies them from serving on the committee for two years.
“These are not simply disclosure enhancements. This is a shift in the locus of power. Shareholders now have a statutory mechanism to hold individual committee memberS accountable for remuneration decisions, and that changes how every remuneration policy and report should be prepared,” Leila Ebrahimi, Partner, Executive Reward, Tax and Legal Services at PwC South Africa.
The amendments also introduce mandatory workforce pay disclosures, including the remuneration of the highest- and lowest-paid employees, average and median pay, and wage-gap ratios.
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‘Could limit the country’
While the report notes that South Africa is entering a period of greater transparency and fairness, it cautions that competitiveness must remain a priority. PwC argues that an excessive focus on limiting executive pay could undermine the country’s ability to attract and retain top leadership talent in an increasingly global market.
The report further highlights concerns around incentive design. Although most executives view short-term incentives as effective motivators, fewer than half believe long-term incentives have the same impact, despite often forming the largest component of executive remuneration.
Looking ahead, PwC says remuneration committees will play a broader strategic role, overseeing shareholder engagement, workforce pay disclosures, cybersecurity accountability and the integration of skills-based pay models as organisations adapt to technological change and evolving governance expectations.
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