Original Research

The relationship between chief executive officer compensation and the size and industry of South African state-owned enterprises

Mariette Coetzee, Magda L. Bezuidenhout
SA Journal of Human Resource Management | Vol 17 | a1120 | DOI: https://doi.org/10.4102/sajhrm.v17i0.1120 | © 2019 Mariette Coetzee, Magda L. Bezuidenhout | This work is licensed under CC Attribution 4.0
Submitted: 05 September 2018 | Published: 26 June 2019

About the author(s)

Mariette Coetzee, Department of Human Resource Management, University of South Africa, Pretoria, South Africa
Magda L. Bezuidenhout, Department of Human Resource Management, University of South Africa, Pretoria, South Africa


Orientation: Concerns about exorbitant executive compensation are making headlines, because executives receive lucrative packages despite state-owned enterprises (SOEs) performing poorly. It appears as if chief executive officers (CEOs) are not being held accountable for the performance of the SOEs.

Research purpose: The purpose of the study was to determine whether the size and the industry of an SOE had an impact on CEO compensation packages.

Motivation for the study: A greater understanding of the relationship between CEO remuneration and the size and type of industry of SOEs would assist with the standardisation of CEO remuneration and linking CEO pay to SOE performance.

Research approach/design and method: A multiple regression analysis on a pooled dataset of 162 panel observations was conducted over a 9-year period. Financial data of 18 SOEs were extracted from the McGregor BFA database and the annual reports of SOEs.

Main findings: The findings show that the size of an SOE does not influence the total compensation of CEOs. However, larger SOEs pay larger bonuses due to these SOEs being in a stronger financial position to offer lucrative bonuses. CEO’s remuneration was aligned within certain industries.

Practical/managerial implications: The findings emphasise the need to link CEO compensation with SOE performance. Standardisation in setting CEO compensation and implementing performance contracts should be considered.

Contribution/value-add: The study confirms that CEO pay is not linked to performance and not justified when considering SOE size or industry.


CEO compensation; company performance; fixed pay; industry; short-term incentive; SOE Size; state-owned enterprises; total compensation


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Crossref Citations

1. Challenges faced by CEOs in executing turnaround strategies in state-owned enterprises in South Africa
Morongwa Mpete, Christoph Maier
South African Journal of Business Management  vol: 55  issue: 1  year: 2024  
doi: 10.4102/sajbm.v55i1.4220