Zim’s July Ndlovu among best paid CEOs in SA

Remuneration reports from some of South Africa’s most prominent mining companies revealed their chief executive officers (CEOs) massive salaries in 2022, with some earning more than quadruple that of the best-paid banking CEOs.

According to the Minerals Council of South Africa, the mining sector is an important contributor to South Africa’s fiscus and its citizens.

In 2022, the industry’s direct contribution to gross domestic product (GDP) grew by 4 percent to R494 billion compared with R475 billion in 2021 — raising its percentage contribution to the economy to 7,53 percent.

Additionally, export values grew to R878 billion in 2022 from R856 billion in 2021 due to high commodity prices, which improved by a notable 70 percent year-on-year, said the Minerals Council.

In 2021, the South African mining industry passed a notable milestone when the total value of the minerals produced exceeded R1 trillion for the first time. This new record was maintained last year, as production reached a high of R1,18 trillion in 2022.

The mining industry is also one of the few sectors in the prevailing economic climate that creates jobs. In 2022, the sector created 15 500 jobs, lifting total employment to 475 560 nationwide.

The council further noted that taxes paid by the industry to the government have helped save the country’s fiscus from dangerous debt metrics exacerbated by the Covid-19 lockdown and economic contraction.

Taxes paid by the South African mining industry included corporate income tax of R74 billion, R29 billion in value-added taxes and R14 billion in mineral royalties.

Although the industry reports showed encouraging statistics, the Minerals Council warned that the sector is under considerable pressure.

“Once again, the mining industry has shot out the lights when considering its financial performance and contribution to the economy in 2022.

“However, we remain concerned about the worsening constraints in rail and port logistics, which means we have yet again forfeited the benefits of high commodity prices and demand, as well as inadequate electricity supply,” said Minerals Council CEO Roger Baxter.

The Minerals Council estimates the opportunity cost of rail and port constraints to have increased to R50 billion in 2022 from R35 billion the year before when delivered tonnages are measured against targeted tonnages.

“If the rail network were operating at nameplate capacity, with a few minor enhancements, South Africa would realise R151 billion more in bulk mineral sales,” said Baxter.

CEO pay

Despite the warnings from the Minerals Council, the overall financial performance and contribution to the economy in 2022 meant that the relevant CEOs within the mining industry received massive paydays.

BusinesTech looked at five of the most prominent and well-known mining companies listed on the Johannesburg Stock Exchange (JSE) to see what their CEOs earned in 2022.

These companies are Anglo-American, BHP Billiton, Sibanye-Stillwater, Thungela Resources, and African Rainbow Minerals (ARM).

It must be noted that some of these companies are multinational, meaning their remuneration figures were presented in dollars (US$) or pounds (£).

To standardise the salaries offered in this article, the total remuneration amounts were converted to rands using the applicable exchange rate as of May 2, 2023.

BHP Billiton’s chief executive Mike Henry, the top-paid mining CEO on this list, took home a whopping US$14,7 million (R269,22 million) in 2022. This figure includes base salary, short-term incentives, cash bonuses, benefits and long-term incentive plans.

This is 4,3 times more than what Capitec CEO Gerrie Fourie was paid (R62 million) and almost five times more than Nedbank CEO Mike Brown, who earned R43,6 million.

BHP Billiton employed 79,477 workers in 2022, and according to its remuneration report, Henry earned 123 times more than the average employee. His salary works out to around R737,589 per day.

Of the five CEOs, ARM chief executive Mike Schmidt took home the “smallest” amount of R87,62 million. However, ARM founder and executive chairman Patrice Motsepe was the highest paid at the company, taking home R138,63 million.

The table below outlines what these CEOs earned in 2022 and how that translates per day. — businesstech.co.za