The presidential proclamation bringing Section 6 of the Companies Amendment Act into effect marks a significant shift in South African remuneration governance. With the insertion of sections 30A and 30B into the Companies Act, the preparation of a company remuneration policy is no longer merely a matter of King Code good governance practice for affected companies. It is now a statutory requirement.

The amendments, effective from 22 May 2026, introduce a formal remuneration governance framework for public and state-owned companies, requiring shareholder approval of remuneration policies and annual remuneration reports. They also strengthen remuneration disclosure obligations, including pay-gap reporting.

This is not simply a compliance development. It is a governance, investor relations, human capital, and reputational issue. In summary, here are the key issues to note:

1. The Remuneration Policy Is Now a Shareholder-Approved Governance Instrument

Under the new section 30A, affected companies must prepare a remuneration policy and present it to shareholders for approval by ordinary resolution at the annual general meeting. Once approved, the policy remains valid for three years, unless there are material amendments, in which case fresh shareholder approval is required before implementation.

The critical question for boards is no longer only: “Is our remuneration policy compliant?”

The better question is: “Will shareholders understand it, trust it, and vote for it?”

2. The Remuneration Report Now Carries Real Consequences

Section 30B requires affected companies to prepare an annual remuneration report for the previous financial year and present it to shareholders for approval by ordinary resolution at the AGM. This is a significant governance development.

It means remuneration voting outcomes are no longer symbolic expressions of shareholder dissatisfaction. They now have consequences for remuneration committee accountability.

Boards should therefore treat the remuneration report as more than a statutory disclosure. It is now a shareholder engagement document.

3. Pay-Gap Disclosure Will Become One of the Most Scrutinised Parts of the Report

One of the most important developments is the introduction of prescribed pay-gap disclosures. This will be one of the most sensitive areas of the new framework.

Pay-gap disclosure is not merely a calculation exercise. It is a narrative exercise. Companies will need to explain the context behind the numbers: workforce composition, outsourcing models, part-time and temporary workers, geographic spread, skills scarcity, bargaining unit dynamics, executive pay structures, incentive outcomes, and transformation considerations.

A poorly explained pay gap can create reputational risk even where the underlying remuneration practices are defensible. A well-explained pay gap can demonstrate governance maturity, transparency, and a credible commitment to responsible remuneration.

4. The Real Challenge Is Implementation

Many companies will need to move quickly from awareness to implementation. The practical work includes:

• reviewing existing remuneration policies against section 30A;
• updating AGM resolutions and shareholder approval processes;
• preparing a compliant remuneration report under section 30B;
• developing a defensible pay-gap methodology;
• validating remuneration data across HR, payroll, finance, and reward systems;
• preparing RemCo and board papers;
• aligning disclosures with King Code and JSE expectations where applicable;
• developing shareholder engagement strategies;
• drafting clear explanations for remuneration outcomes and pay gaps.

This is where companies should avoid a narrow legalistic approach.

The best remuneration disclosures will not simply ask, “What does the Act require us to disclose?” They will ask: “What does responsible remuneration require us to explain?”

How We Can Assist

Through Musekwa Reward Advisory, we assist boards, remuneration committees, executives, and HR leaders to prepare for this new remuneration governance environment.

Our support includes:

• remuneration policy reviews and redesign;
• section 30A and 30B implementation readiness assessments;
• remuneration report drafting and review;
• pay-gap analysis and narrative development;
• RemCo advisory and board paper preparation;
• shareholder-sensitive incentive design;
• executive remuneration governance frameworks;
• preparation for AGM remuneration votes.

The commencement of sections 30A and 30B is not only a compliance milestone. It is an opportunity for companies to strengthen trust, improve transparency, and demonstrate that remuneration is being governed responsibly, and a strategic lever to drive performance that meets stakeholder expectations.