For public and state-owned companies, pay policies now require shareholder approval via an ordinary resolution. If investors vote down a company's annual remuneration report, the eligible non-executive directors on the remuneration committee must stand for re-election to that committee at the next AGM. If the report is rejected two years in a row, eligible members are barred from the committee for a period of two years. The amendments also lift the hood on pay by requiring fuller disclosure of the gap between a company's highest and lowest earners.
Durban-based fashion retailer Mr Price treated its recent AGM as an early trial run under the new regime, after meeting shareholders holding over 67% of its ordinary shares before the September ballot. Both pay resolutions passed, but opposition rose, with ordinary votes against exceeding one-third, compared with about 26% the prior year. The company said concerns centered on how performance measures are weighted and how clearly it discloses strategic targets within short-term incentives. It added that investors did not all agree, and that its remuneration committee aimed to balance the varied feedback.
Zwelakhe Mnguni, serving as CIO of Benguela Global Fund Managers, said the message so far is clear: "Engagement is no longer a substitute for substance." He said companies are bringing conversations forward and making them more structured, though some outreach remains defensive, with more meetings and more disclosure but little movement on incentive targets or how boards exercise discretion. The rule changes also arm investors with more data on pay gaps. Mnguni expects the initial phase to bring heavier engagement, followed by pay design changes where boards face persistent pushback. "Binding votes will not automatically produce that alignment," he said. "They will, however, make it more costly for boards to pretend the conversation is only about engagement."
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Your vote on pay now carries real weight. Expect more outreach as boards court support earlier, and watch whether the talk shows up in targets, disclosure and the use of discretion. When boards run into steady resistance, incentive plans tend to shift - and that can shape how companies set priorities and chase performance.
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