Shoprite chief executive salary package hits R83m

Shoprite chief executive Pieter Engelbrecht has seen his salary, inclusive of bonuses, rise to R83.3 million in the 2024 financial year.

This cements his place as South Africa’s best-paid retail chief executive.

Engelbrecht earned a 6.6% inflationary adjusted increase as part of a revamped executive compensation structure that includes the new executive deferred incentive.

It comes as the country’s biggest private sector employer navigates a challenging economy fraught with high unemployment and elevated interest rates.

Over the past three years, Engelbrecht’s salary has steadily increased, from R63.5 million in 2022 to R64.7 million in 2023.
Remuneration committee chair Peter Cooper cites strong financial results as a key factor for this increase.

“The increase is also affected in the current year, due to the ESP performance shares being awarded in September 2020 at R184.96, rising by 46% to a year end volume weighted average price of R270.40 for single-figure reporting purposes.”

In the year under review, Shoprite reported a 12% rise in group sales and a 12.4% increase in trading profit, alongside a 7.4% increase in dividends per share.

Chief financial officer Anton de Bruyn received a 16% adjustment.

The group says this change was implemented following a benchmarking review to ensure competitive pay in a challenging economic environment.

The group has also taken steps to increase wages for its lowest-paid workers. Effective 1 March 2024, the national prescribed minimum wage for general assistants was raised to R27.58 an hour, with Shoprite ensuring compliance across all new appointments.

The group says all general staff employed as of 1 May 2024 received an annual increase, resulting in an average hourly rate of R30.63, which is 11.1% above the national minimum wage.

However, the hefty rise in executive compensation raises concerns when compared with the earnings of the company’s lowest-paid workers.

According to a report by Just Share, the average chief executive in the retail and wholesale sector earns 597 times more than the lowest-paid worker. At Shoprite, the chief executive earns 991 times more than the lowest-paid employee, the report says.

The report looks at major players Shoprite, Pick n Pay, Pepkor, TFG, Woolworths, Mr Price, Dis-Chem, Clicks, Truworths and Spar. It says these companies collectively employ nearly 390 000 full-time employees and generate annual revenues of R833.7 billion.

However, the average lowest-paid worker in the wholesale and retail sector would need to work for 21 months to earn what an average chief executive in this sector earns in one day, Just Share says.

“Through our Shoprite Employee Trust, established by Shoprite Checkers with 40-million shares in 2022, we are ensuring our employees are aligned to benefit from the group’s performance. As things stand this year, 98% of the trust beneficiaries are black and 69% were black women, reinforcing our commitment to transformation and equitable empowerment in line with SA demographics,” the group says.

“We are also working to ensure that our entry-level employees are paid a fair wage, ensuring that as a minimum they are paid on average 11% above the national regulated minimum wage.

In a country with high unemployment, relatively low growth and poor service delivery — and with a shrinking tax base, where an estimated 3-million people pay 90% of the country’s income tax — we are striving to find the right balance in meeting the drive to pay a ‘living wage’, with the benefits of providing a secure job that offers longer-term growth opportunities.”

– goban@businesslive.co.za