The 2009 Directors' Remuneration Report, released by Mabili on Tuesday, revealed that IT companies continued to have the lowest director pay packages for companies listed on the JSE main board.
The average guaranteed package paid to IT CEOs during 2008 amounted to R2.3 million, while bonuses pushed the average total package to R3.5 million. Both of these pay elements were the lowest across all Industries. The overall median CEO package rose from R4.7 million to R5.3 million.
Laurence Grubb, MD of Mabili Reward, says it is worth noting that the IT sample, as it is listed on the JSE main board and presented in the Directors' Remuneration Report, is a relatively small group.
“It is made up of 11 companies of which only two indicate a market capitalisation of over R1 billion.” The vast majority of companies in the IT industry would be classified as Category A companies (those with a market capitalisation of less than R1 billion), he notes.
Competitive packages
While the packages may appear lower in real terms, they are competitive when viewed in context, says Grubb. “Our research indicates that a guaranteed CEO package of R2.2 million is very competitive when compared to the median CEO package for Category A companies of R1.8 million.'
Grubb added that the average total CEO package of R3.5 million received in the IT sector is significantly higher than the total CEO package indicated by Category A companies of R2.6 million.
He says if one looks at a more representative technology sample - one that includes telecommunications companies listed on the main board - the level of IT pay rises is in line with a number of other vertical markets.
Even though in this report, telecommunications companies are not categorised as IT organisations, they have a strong technology orientation, and contribute significantly to the ICT landscape, Grubb points out.
Furthermore, if one views a broader sample of technology oriented companies, the pay levels move in line with other vertical markets that show a broader range of companies in terms of size and complexity. In this context IT pay is actually very competitive.
At the top of the payroll
Total packages for chief financial officers and other senior executives remained almost stagnant, at R2.9 million and R2.6 million, respectively.
However, the highest earning executive in the IT industry this year is Jens Montanana, from Datatec. According to Mabili, his dollar denominated remuneration converts to a total package of R15.3 million.
The 2009 Directors' Remuneration Report shows that difficult market conditions resulted in "reasonably low" executive-pay increases in comparison to previous years.
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