Mergence wants wage gap disclosed in annual reports

Mergence Managing Direcgtor Masimo Magerman wants all listed companies to disclose the wage gap between the highest and lowest paid workers when the annual reports are published. Image: Mergence Group

While levels of income inequality between executives and workers is growing globally‚ Mergence Portfolio Manager Brad Preston said it was concerning that South Africa ranked above a number of developed and developing market peers.

He suggested during a press briefing that the wage gap between the CEOs pay and the company's lowest paid workers be disclosed in the annual reports of JSE-listed companies.

The US is currently debating this issue‚ with the Securities and Exchange Commission (SEC) voting in September last year in favour of disclosing the wage gap between CEOs of public companies and that of their workers.

According to the Stats SA quarterly employment report the average total compensation earned by non-agricultural workers in South Africa last year was just below R180‚000 a year. This means that the seven highest paid CEOs on the JSE earned more than 300 times what the average employed South African makes during the year.

Mergence Managing Director Masimo Magerman said as an impact investor the company was interested in both high returns and the social effect of investments.

"We are concerned by the high level of inequality within South African society and so we need to approach the topic of remuneration within the companies that we invest our clients' savings‚ with great care and thought‚" he said.