South African firms are intensifying shareholder engagement ahead of annual general meetings after amendments to the Companies Act made executive pay votes binding in May. Mr Price Group Ltd.'s September AGM served as an early test, with the Durban-based retailer engaging investors representing 67% of ordinary shares. Both remuneration resolutions passed, but 34% of votes opposed the pay policy, up from 26% a year earlier. Zwelakhe Mnguni, chief investment officer at Benguela Global Fund Managers, called it a "useful early data point" showing "engagement is no longer a substitute for substance." Shareholder concerns focused on performance-measure weighting and disclosure of strategic targets in short-term incentives.

Under the new rules, public and state-owned companies must secure shareholder approval for remuneration policies by ordinary resolution. If the annual remuneration report is rejected, eligible non-executive remuneration committee members must stand for re-election at the next AGM; a second rejection bars them for two years. Companies are holding earlier, more structured discussions, though Mnguni notes some engagement remains defensive. The changes also require greater disclosure of the pay gap between highest and lowest earners. Mnguni expects more engagement initially, followed by pay-structure changes where boards face persistent opposition, noting binding votes make it "more costly for boards to pretend the conversation is only about engagement."