The relationship between the determinants of executive remuneration in South African state-owned enterprises

Abstract

Orientation: Research on executive remuneration should be able to indicate the necessary elements and dimensions at work when deciding on an executive’s package.

Research purpose: The purpose of this article was to review a correlation of elements as determinants of executive remuneration.

Motivation for the study: The limited research on executive remuneration tends to focus on how executive pay varies with performance and less on the determinants of executive remuneration.

Research design and method: A quantitative research method was used. The target population consisted of executives from 21 South African state-owned enterprises (SOEs). The research design was a cross-sectional study. A categorical multiple regression analysis was performed.

Main findings: The research results seem to suggest that there is a significant statistical correlation between organisation size and type of industry; job function and type of industry; organisation size and job function; and the level of education and job function as a determinant of executive remuneration within the context of South African SOEs. However, the extent of the correlations between the determinants of executive remuneration is not the same.

Practical/managerial implications: The research results create awareness amongst human resources practitioners and consultants of the extent to which some of the determinants of remuneration may apply in practice.

Contribution/value-add: This study highlights the importance of probing further with the effect of size correlation in quantitative research in the context of executive remuneration.