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The Companies Act amendments that took effect on May 22 require public and state-owned companies to put their remuneration policies and reports to a binding shareholder vote. If the remuneration report fails, remuneration committee members face personal consequences: re-election at the next AGM after a first failure and a two-year bar from the committee after a second. With no transitional arrangements, some companies had already published their remuneration reports and AGM notices before the amendments’ commencement date was announced. However, because their AGMs took place after the amendments came into force, they unexpectedly found themselves subject to the new voting requirements.The first wave of AGMs since the amendments is already revealing shareholder sentiment. At Absa’s AGM on June 2, 43% of shareholders voted against the implementation report. At Old Mutual’s AGM three days later, about 32% voted against the remuneration policy and 29% against the implementation report. Both meetings were called before the amendments took effect and ran as nonbinding advisory votes under the old regime.These dissent levels are notable: they represent a material deterioration from the 83.8% average approval rate of the prior year, and they set the tone for what is coming. Under the old nonbinding advisory vote regime, a vote against was seen as a signal companies could, to some extent, decide how seriously to take it. Under the new binding regime, failed resolutions bring about real sanctions. Shareholders who previously expressed mild dissatisfaction by voting against a nonbinding resolution, knowing it would trigger engagement but nothing more, now face a binary choice: approve or impose consequences on named individuals. Some will be more cautious, understanding what is at stake, and as we saw in the UK after the introduction of the binding vote on the remuneration policy, which we continue to observe, votes that fail the 50% threshold are rare. However, the early results suggest that shareholders will not completely back off, and remuneration committees would do well to take the new regime seriously.It has been noted by some that the shift to binding votes has, paradoxically, raised the threshold for formal consequences.Between 25% and 50%, companies are in a governance no-man’s land: too much dissent to ignore and too little to trigger the statutory mechanism. Under the previous JSE listing requirements, 25% of votes cast against the remuneration policy or implementation report triggered a mandatory engagement process: the company had to disclose how it would address shareholders’ concerns, invite dissenting shareholders to engage, and report back at the next AGM. The JSE has confirmed that compliance with the new Companies Act provisions satisfies the listings requirements, so it is understood that the nonbinding advisory vote falls away completely for domestic issuers.The new regime requires an ordinary resolution, meaning more than 50% of votes cast must be against for the resolution to fail. This means that a company can now face 49% dissent and face no formal consequence or requirement to engage. Between 25% and 50%, companies are in a governance no-man’s land: too much dissent to ignore and too little to trigger the statutory mechanism. Companies that manage this well will engage voluntarily and pre-empt a possible greater fallout the next year. But if the passed resolution is taken at face value and shareholders are not appropriately engaged, dissent is likely to harden rather than dissipate, making a failed vote the next year an increased possibility.So what should boards do now? Other than the immediate priority of compliance with the letter of the amendments, it is important that reward teams and remuneration committees get to grips with the new dynamics of the vote.Under the old regime, a remuneration committee’s accountability ran primarily to the board, with shareholders as a check. Under the new one, shareholders have a direct statutory mechanism to remove committee members from service. Even with the higher threshold of 50%, that changes the dynamics of what to disclose, how to disclose it, and how far ahead of dissent companies need to be.The early evidence from Absa and Old Mutual suggests that South African institutional investors are not inclined to soften their stance simply because the vote now carries consequences. Committees that wait for the vote and then respond are already behind. The committees that will navigate this well are the ones engaging major shareholders on remuneration policy before it is tabled, stress-testing their implementation reports against the questions proxy advisors will ask, and preparing for the possibility that 40% dissent, while technically a pass, is functionally a warning shot.The voting regime is only one dimension of a broader shift and, in effect, signals the standard to which remuneration committees will now be held. Disclosure requirements have increased, and shareholders’ votes now carry more power. The substance of what remuneration committees are expected to govern has expanded well beyond pay quantum: navigating mandatory workforce pay disclosures, designing incentives that genuinely shape behaviour rather than satisfy governance checklists, responding to AI-driven changes in how work is valued, and exercising discretion under a King V framework that demands structured transparency. These are not future problems but issues that will determine whether the next remuneration policy is approved and whether the remuneration report earns shareholder support or attracts a second strike.Our latest publication, “The South African Executive Remuneration Landscape 2026: Strategic Insights for Leadership”, sets out the topics remuneration committees should be discussing now and the frameworks for addressing them. The early evidence from recent AGMs suggests that South African institutional investors are not inclined to soften their stance simply because the vote now carries consequences — staying ahead of the curve starts with knowing what the conversation is about.• Ebrahimi and Mabaso lead the executive reward practice at PwC South Africa.
