Companies Act


The proposed amendments to the Companies Act 71 of 2008, specifically sections 30A and 30B, mark a pivotal moment in South Africa's corporate landscape. These changes introduce the "Shareholder's Say on Pay" clause, which empowers shareholders to influence executive compensation policies through binding votes at Annual General Meetings (AGMs). Let's delve deeper into this critical development.

Understanding the shareholder's “Say on Pay”:

To grasp the significance of the Shareholder’s, Say on Pay, we must first understand the definitions and purpose behind these amendments. Sections 30A and 30B mandate greater transparency by requiring affected companies to disclose executive compensation in the annual reports.

Shareholders now have a mechanism to express approval or disapproval during AGMs. Companies must address their concerns if a substantial portion of shareholders oppose the remuneration report.

Implications for Companies and Shareholders:

Corporations face the challenge of justifying their executive compensation policies and payments. With the spotlight on performance-based practices, companies must align pay with results delivered.

These changes empower shareholders to participate in corporate governance matters actively. By understanding their role and influence, shareholders can strengthen organizations and assist the board of directors.

Executives’ pay now hinges on demonstrated results. Companies must justify compensation based on their performance and long-term strategic goals.

The Shareholder's Say on Pay represents a seismic shift in accountability and transparency. As companies adapt to these amendments, they must navigate the delicate balance between rewarding executives and ensuring shareholder trust.

Global Comparisons:

The recent amendments to the Companies Act 71 of 2008, specifically sections 30A and 30B, have placed South Africa in alignment with international trends. Similar "Say on Pay" regulations exist in other jurisdictions, including the United Kingdom, Australia, and certain European countries.

Impact Anticipated for Businesses:

In countries where "Say on Pay" regulations are already established, companies have witnessed improved communication between executives and shareholders. Rationalization of executive pay structures and performance metrics has become a focal point of discussion.

The revised legislation mandates detailed remuneration reports to be provided to shareholders. This heightened transparency ensures that executive compensation practices are open for scrutiny.

While transparency is crucial, organizations must strike a balance by engaging effectively with shareholders while managing compliance costs not to become a challenge.

The changes reinforce the need for executive pay to align closely with performance outcomes. Executives will be held accountable for delivering on the agreed targets.

Preparing for Implementation of “Say on Pay”:

Organizations should thoroughly review existing compensation policies. Ensure they align with the new legislation and emphasize performance-based metrics.

Transparency practices would also need an upgrade. Companies must enhance their reporting mechanisms to meet the new requirements.

Shareholder feedback becomes critical. Companies must actively seek input from shareholders on compensation and remuneration policies.

Staff and executives should understand the legal requirements. Internal communication and education about the changes are essential.

Executives' pay should be directly tied to specific performance indicators. Seek professional advice to navigate the nuances of the evolving law.


As South Africa embraces the "Shareholder's Say on Pay," businesses must adapt swiftly. By learning from global practices and proactively preparing, companies can navigate this transformative shift effectively.

By embracing transparency, engaging with shareholders, and seeking professional advice, businesses can navigate these changes effectively, ensuring compliance while maintaining their competitive edge.

The South African Companies Act applies to all companies. However, the revised sections 30A and 30B of the act are specified as applying to only public companies and state-owned companies.