Public companies and state-owned companies became subject to new remuneration governance and disclosure requirements with effect from 22 May 2026, following the commencement of key sections of the Companies Amendment Act, 2024.* These companies will now be required to prepare a formal remuneration policy for shareholder approval, prepare an annual remuneration report, disclose prescribed employee pay metrics, and disclose the remuneration gap between the top 5% highest-paid employees and the bottom 5% lowest-paid employees. In addition, companies that are required to have their annual financial statements audited, or voluntarily have their annual financial statements audited in terms of section 30(2), should consider the section 30 disclosure requirements relating to directors and prescribed officers.
The changes come into operation against the backdrop of an ongoing public debate about the widening gap between what executives earn and what the rest of the workforce takes home. Beyond compliance, companies will face questions about how they reward people at different levels of the organisation. In principle, the amendment act strengthens accountability, improves oversight and allows for more substantive engagement between boards and shareholders on remuneration decisions.
In practice, the transparency will not, on its own, produce understanding. The amendments require companies to disclose a remuneration gap as a ratio between the total pay of the top 5% of earners and the total pay of the bottom 5%. The ratio may allow for dramatic news headlines, but context will remain important.
In some companies, a significant gap between executive pay and the pay of the lowest earners may reflect historic inequalities that the organisation has yet to address. But in others, the gap may reflect sector norms, skills scarcity, geographic spread, outsourcing arrangements, the composition of the workforce or deliberate strategic choices. That means companies will not only need to disclose the data, but also think about how they will communicate the story behind the numbers.
This should encompass helping shareholders understand what the gap is, why it exists, how remuneration is determined, what the company is doing about unfair or unjustifiable disparities, and how pay decisions link to performance, skills, responsibility and long-term value creation.
We expect guidance from industry bodies in the weeks and months ahead to help companies get their heads around the nuances. In the meantime, affected companies should not wait until annual financial statements are being finalised to implement the necessary changes.
Here is an at-a-glance view of what the changes will mean.
What has changed for affected companies?
Companies must take note of three major new requirements:
- Named individual disclosure: Annual financial statements must disclose the remuneration and benefits received by each director and prescribed officer. These individuals must be named. Aggregated or anonymised disclosure is not enough.
- Formal remuneration policy: Affected companies must prepare and present a remuneration policy for shareholder approval by ordinary resolution at the annual general meeting (AGM). Once approved, the policy remains in force for three years. Material amendments require fresh shareholder approval before they can be implemented.
- Annual remuneration report: Companies must prepare an annual remuneration report, covering the previous financial year. It must include a background statement, a copy of the company’s remuneration policy and an implementation report.
What do companies need to disclose in the implementation report?
The implementation report should include:
- Total remuneration received by each director and prescribed officer
- The total remuneration of the highest-paid and lowest-paid employees
- The average and median remuneration of all employees; and
- The remuneration-gap ratio between the top 5% and bottom 5% of earners.
“Total remuneration” covers salary and benefits, employer contributions to benefit funds, short-term and long-term incentives, share options and incentive awards.
Which companies are affected?
The remuneration policy and annual remuneration report requirements apply to listed and unlisted public companies and state-owned companies. Most ordinary private companies will not be required to prepare a shareholder-approved remuneration policy or annual remuneration report. However, if a private company is required to have its annual financial statements audited, or has them voluntarily audited in terms of section 30(2), the section 30 disclosure requirements relating to directors and prescribed officers will need to be considered and may require disclosure in the annual financial statements.
What companies should do now?
Given that there appears to be no transitional period, affected companies should prepare to comply from their next applicable reporting and AGM cycle. For most companies, the main practical challenge lies in ensuring the integrity and comprehensiveness of their data. With the broad definition of total remuneration, payroll costs will not be enough to meet the reporting requirements.
Companies will need to identify, classify and reconcile all elements of remuneration properly. Remuneration information typically sits across payroll, HR and finance systems, company secretarial records, board minutes and other records. Management will need to reconcile data from multiple sources to ensure the final report is accurate and defensible.
A practical implementation plan should cover:
- Confirming whether the company falls within scope of the new requirements.
- Conducting a gap analysis against the new section 30, 30A and 30B requirements.
- Preparing or updating the remuneration policy for shareholder approval.
- Reconciling payroll, HR and finance data to support the required disclosures.
- Confirming that all directors and prescribed officers have been correctly identified.
- Ensuring that bonuses, incentive awards, share-based benefits and employer contributions are properly captured.
- Checking that the remuneration report is consistent with the annual financial statements, directors’ report and governance disclosures.
- Obtaining board or remuneration committee sign-off before AGM documentation is finalised.
Failure to meet the new requirements could result in shareholder challenge, governance concerns, reporting delays and reputational risk. Companies will also need to consider how the new requirements shift remuneration reporting from a compliance exercise to a governance and communication discipline. Boards and remuneration committees will need to be ready to engage with shareholders, trade unions, regulators and other stakeholders in more detail about how they make decisions related to employee compensation.
* The Proclamation Notice 313 of 2026 can be viewed here, while the 2024 Companies Amendment Act can be downloaded here.
