Transformation as an element of executive remuneration in South African state-owned enterprises.

Abstract

Challenges with transformation in respect of executive remuneration are widely acknowledged. Two types of measures, black economic empowerment and the Employment Equity Act of 2003, have emerged as potential drivers of transformation. However, their impact on executive compensation remains unclear. Observers felt the policy was being used to only benefit an elite few. This article aims to describe and identify common practices on transformation in executive remuneration at South African state-owned enterprises. An eclectic approach is used to develop a broader theoretical framework within which a better understanding of executive remuneration and transformation as an element of executive remuneration in the context of South African SOEs could be achieved. The sample for the survey includes 13 key informants as representatives of South African state-owned enterprises. The findings reveal institutional and contextual impediments in the implementation of transformation in executive remuneration. The findings also shed light on what is happening at the operational level in the SOEs, which may not be available in most empirical studies on executive remuneration in South African SOEs. Recommendations are made on for interventions and proper implementation.