Companies Amendment Act: Remuneration Disclosures and Dispute Resolution Mechanisms through the Companies Tribunal now Effective

On 22 May 2026, President Ramaphosa proclaimed that sections 5, 6 and 19 of the Companies Amendment Act 16 of 2024 (“First Companies Amendment Act”) came into operation on 22 May 2026.

The commencement of these provisions marks a significant development in South African corporate governance regulation, particularly in relation to executive remuneration disclosures, shareholder oversight of remuneration practices, and dispute resolution mechanisms under the Companies Act 71 of 2008 (“Companies Act”). 

A copy of the relevant Government Gazette is here.

Background to the proclamation

On 26 July 2024, President Ramaphosa signed into law the highly anticipated First Companies Amendment Act, and the Companies Second Amendment Act 17 of 2024 (“Second Companies Amendment Act”), marking substantial reforms to the Companies Act.

All amendments introduced by the Second Companies Amendment Act came into operation on 27 December 2024. However, as noted in our previous article, only certain amendments stipulated in the First Companies Amendment Act became operational on 27 December 2024. Please see our previous article summarising the amendments which took effect on 27 December 2024.

Notably, the material amendments relating, amongst other things, to remuneration disclosure and remuneration policy provisions would become operational on a date or dates to be fixed by the President by notice in a Government Gazette.

Amendments which commenced on 22 May 2026

In accordance with the proclamation, the following amendments to the First Companies Amendment Act became operative with effect from 22 May 2026:

1. Remuneration Disclosures in annual financial statements (“AFS”): Section 5 of the First Companies Amendment Act:

• With effect from 22 May 2026, the AFS of every company that is required in terms of the Companies Act to have its AFS audited, must include particulars regarding:
  • the disclosure of the remuneration and benefits received by each individual director and prescribed officer, both of whom must now be specifically named; and
  • where any provisions of the directors’ remuneration report become subject to an audit in terms of section 30 of the Companies Act, the amendment provides that the company’s remuneration policies and the background statement forming part of the remuneration report are excluded from the audit requirement.

2. Approvals of Remuneration Policies and Remuneration Reporting: Section 6 of the First Companies Amendment Act: 

• Section 6 of the First Companies Amendment Act inserts section 30A, which deals with remuneration policies; and section 30B, which establishes a comprehensive remuneration reporting framework applicable to public companies and state-owned companies.  With effect from 22 May 2026, and in accordance with:
  • section 30A of the Companies Act:
    • all public companies and state-owned companies must prepare and present for approval a remuneration policy by ordinary resolution at the annual general meeting (“AGM”). If it is not approved, it must be presented at the next AGM or a shareholders' meeting convened for that purpose.
    • once the remuneration policy is approved at the AGM, it remains effective for a period of three years and thereafter must be re-approved.
    • if the approved remuneration policy requires material amendments prior to expiry of the three-year period, the amendments may be implemented only after approval by ordinary resolution at either a special shareholders' meeting or the AGM.
  • section 30B of the Companies Act:
    • each year all public companies and state-owned companies must prepare a remuneration report in respect of the previous financial year for presentation and shareholder approval at the AGM by ordinary resolution.
    • the remuneration report must include, amongst other things, a copy of the company’s remuneration policy, and an implementation report which discloses: (i) the total remuneration received by each director and prescribed officer; (ii) the total remuneration of the: highest-paid employee; (iii) the total remuneration of the lowest-paid employee; (iv) the average remuneration of all employees; (v) the median remuneration of all employees; and (vi) the remuneration gap ratio between the top 5% highest-paid employees and the bottom 5% lowest-paid employees.
    • where a remuneration report is not approved by ordinary resolution at an AGM, the remuneration committee must, at the following AGM, explain the manner in which shareholder concerns have been taken into account. Directors serving on the remuneration committee who are not involved in the day-to-day management of the business may also be required to stand for re-election.
    • if the remuneration report is  not approved in the following year at an AGM by ordinary resolution, directors serving on the remuneration committee who are not involved in the day-to-day management of the business may become ineligible to continue serving on the remuneration committee for a period of two years, subject to the exclusion applicable to committee members who have served for less than 12 months during the year under review.

3. Alternative Dispute Resolution Mechanisms: Section 19 of the First Companies Amendment Act:

• Section 19 of the First Companies Amendment Act amends section 166 of the Companies Act dealing with alternative dispute resolution. The amendments centralise mediation and conciliation processes within the Companies Tribunal by removing references to accredited entities and other external persons previously contemplated in the section.
• The amendments further introduce an express arbitration mechanism through the Companies Tribunal. Following the issuing of a certificate of non-resolution after mediation or conciliation, an affected person may now refer the matter to the Companies Tribunal for arbitration. The amendments also provide for objections to the Companies Tribunal member conducting both the mediation or conciliation process and the arbitration proceedings. Importantly, any arbitral award issued by the Companies Tribunal will be final and binding on the parties.

Practical recommendations for companies:

• Each company that is required in terms of the Companies Act to have its AFS audited (i.e. public, state-owned or other profit or non-profit companies whose public interest score exceeds the specified thresholds) must (if not already doing so) name their directors and prescribed officers in their AFS;
• All state-owned companies and public companies (such as insurers) must:
  • Review their remuneration policies having regard to the remuneration reports, to ensure that such policies and reports deal with the new requirements;
  • Inform shareholders, ahead of the AGM, of the amendments regarding remuneration policies and remuneration reports;
  • Update and edit AGM notices to include the presentation and approval of the remuneration policy and remuneration report as ordinary resolutions;
  • Ensure that remuneration policies which have been approved and are valid for three-years, are monitored and if any material amendments are required to such policy during the three years, such amendments are approved at an AGM;
  • Monitor the three-year cycle for when the remuneration policy needs to be re-tabled at the AGM; and
  • Include a comprehensive pay-gap analyses ahead of relevant reporting.
• Companies should also familiarise themselves with the new alternative dispute resolution.

For more information on the amendments, remuneration disclosures and remuneration reports, and practical implications of the amendments for companies and directors, please reach out to Clyde & Co’s Corporate and Regulatory team.