Share-based incentives for South African CEOs: Trends 2002−2015

Steenkamp, Gretha; Wesson, Nicolene

doi:10.1080/10291954.2017.1409869

Cited by 8 publications

(16 citation statements)

References 14 publications

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“…Following the successful completion of the vesting period, the director becomes entitled to the payment (this is called the 'vesting date'). Some SBPs are automatically payable on the vesting date, and some can only be exercised by the director during a following exercise period (Steenkamp &Wesson 2018). Upon considering the lifespan of SBPs, it follows that SBPs can be measured at different dates (e.g.…”

Section: Defining Share-based Directors' Remunerationmentioning

confidence: 99%

“…Share-based payment schemes can be divided between appreciation schemes and full quantum schemes (Mavrodinov 2012). Appreciation schemes include share options (usually equity-settled) and share-appreciation rights (cash-settled) and only reward for the increase in the share price from grant date to exercise date, without sharing in the risk that the share price will decrease (Steenkamp &Wesson 2018). Full quantum schemes remunerate the director with the actual value of a share and expose the directors to both increases and decreases in the share price (Steenkamp & Wesson 2018).…”

Section: Defining Share-based Directors' Remunerationmentioning

confidence: 99%

“…Globally and in South Africa, share options were widely employed until 2005, when IFRS 2 was implemented and companies had to start expensing share options (Pretorius & De Villiers 2013). From 2006, share options were slowly replaced by share-appreciation rights and, more recently, by full quantum schemes (Steenkamp & Wesson 2018). Full quantum schemes are viewed as more appropriate long-term incentives, as they provide improved alignment of directorshareholder interest (Steenkamp & Wesson 2018).…”

Section: Defining Share-based Directors' Remunerationmentioning

confidence: 99%

“…From 2006, share options were slowly replaced by share-appreciation rights and, more recently, by full quantum schemes (Steenkamp & Wesson 2018). Full quantum schemes are viewed as more appropriate long-term incentives, as they provide improved alignment of directorshareholder interest (Steenkamp & Wesson 2018).…”

Section: Defining Share-based Directors' Remunerationmentioning

confidence: 99%

“…Because of the magnitude of the rand values potentially involved, the governance of share-based remuneration is critical. Governance includes appropriate approval processes before share-based remuneration is implemented and transparent disclosure of the rand values involved per director, once implemented (Steenkamp & Wesson 2018). In terms of governance through disclosure, both compliance with existing regulatory requirements and consistent between-company disclosure on share-based remuneration would be beneficial to shareholders, analysts and other users of the disclosures.…”

Section: Introduction Orientationmentioning

confidence: 99%

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Share-based remuneration: Per-director disclosure practices of selected listed South African companies

Steenkamp¹,

Dippenaar²,

Fourie³

et al. 2019

Journal of Economic and Financial Sciences

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The Johannesburg Stock Exchange (JSE), the Companies Act of 2008 (the Act) and the third King Report on Corporate Governance (King III) require disclosure on the share-based remuneration of directors of listed South African companies on a per-director basis. Research purpose:The first objective was to determine the disclosure practices of JSE-listed companies relating to share-based remuneration on a per-director basis, to examine whether the disclosure practices comply with regulatory requirements and whether share-based remuneration was disclosed consistently. Comparisons were made between companies in the three largest industries on the JSE (financial, industrial and basic materials industries) as well as between small, medium and large companies. The second objective was to develop a bestpractice disclosure example that complies with the JSE listing requirements, the Act and the latest King Report (King IV).Motivation for the study: Previous research has hinted that share-based remuneration is poorly disclosed in South African annual reports, but it has not specifically been studied.Research approach, design and method: Data on disclosure practices were collected from annual reports. The collected data were analysed against the regulatory requirements to evaluate compliance and compared between companies to evaluate consistency.Main findings: Some companies failed to comply with regulatory requirements (did not disclose the value of share-based remuneration and the number of instruments employed). Large companies were more likely than small companies to comply with regulatory requirements. Between-company inconsistency was noted when comparing the value of sharebased remuneration disclosed by companies in the sample.Practical/managerial implications: Non-compliance with regulatory requirements regarding the disclosure of per-director share-based remuneration was noted in the sample, which could lead to stakeholders having insufficient information for decision-making purposes. Inconsistent disclosure practices, leading to incomparability between similar companies, could hamper effective investment decisions. Contribution/value-add: A best-practice disclosure example was developed to assist companies seeking to comply with disclosure requirements and enhance comparability between JSE-listed companies in future.

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Section: Defining Share-based Directors' Remunerationmentioning

confidence: 99%

Section: Defining Share-based Directors' Remunerationmentioning

confidence: 99%