The President has today (22 May 2026) given immediate effect to several Companies Act amendments that were originally signed into law in 2024. Most noteworthy of these are the changes pertaining to remuneration disclosures and approvals.
Remuneration disclosures for companies that are required to be audited
Clarification has been provided that remuneration disclosures in the annual financial statements of companies that are required to be audited must now include remuneration details for each named individual director and prescribed officer. Although now law, this change has been in practice for some time already, enforced by auditors and the Companies and Intellectual Property Commission.
Statutory remuneration policy, report and approval requirements for public and state-owned companies
Public and state-owned companies must now, in terms of sections 30A and 30B of the Companies Act, prepare a forward-looking remuneration policy, to be approved by ordinary shareholder resolution at the AGM of the company, and thereafter every three years or on any material change.
Changes to the policy may not be implemented until approved by shareholders. Where a vote on the policy fails, the prior remuneration policy will apply until such time as shareholder approval has been obtained.
These companies must also prepare an annual remuneration report, comprising a background statement, the remuneration policy, and an implementation report. The implementation report must, inter alia, detail each director’s and prescribed officer’s total remuneration, and the average total remuneration of all employees, the median remuneration of all employees, and the remuneration gap reflecting the ratio between the total remuneration of the top 5% of the highest paid employees and the total remuneration of the bottom 5% lowest paid employees.
The implementation report is subject to a ‘two-strike rule’. If shareholders do not approve the report at two consecutive AGMs, non-executive directors on the remuneration committee may continue as directors of the board (subject to re-election) but are barred from serving on the remuneration committee for two years. Members who have served on the committee for fewer than 12 months in the year under review are exempt from these consequences.
For JSE-listed companies who are annually publishing a remuneration policy and the implementation report already in accordance with the Listing Requirements, the key change (in addition to the disclosures highlighted above), is that the vote will now be binding, rather than a non-binding advisory vote.
Public companies should be prioritising efforts to align their policies and reports with the new statutory regime, and to conduct comprehensive pay-gap analyses ahead of reporting thereon.
They should also proactively engage shareholders on the requirements of the new statutory regime and carefully prepare for upcoming shareholder meetings to ensure governance readiness and to mitigate against the risk of failed votes.
Other noteworthy changes
Among the changes that are now in effect, are also those providing further guidance on dispute resolution mechanisms through the Companies Tribunal. The long awaited amendments to the Companies Act takeover regulation triggers and the validation of irregular share issues are not yet in effect.
