Orientation: Executive pay has been increasing; however, company performance has not been increasing proportionally. This could be due to an agency problem, resulting in executive pay not aligning with the shareholders’ desired company performance. Research purpose: The purpose of this research was to establish if there was a relationship between the total pay of the chief executive officer and their company’s financial performance in South African Schedule 2 state-owned entities (SOEs). Motivation for the study: A review of literature revealed conflicting views regarding the relationship between executive pay and company financial performance. There were limited studies conducted in South Africa, especially considering SOEs. Research approach/design and method: This research was a quantitative, archival study using 8 years of secondary data from South African Schedule 2 SOEs. Spearman’s rank-order correlation was used to evaluate the relationship. Main findings: One significant weak positive relationship was observed when considering the net profit or loss metric of financial performance. Hence, there was no conclusive relationship between executive pay and company financial performance, which supported the proposition that there is an agency problem in South African SOEs. Practical/managerial implications: There is a distinct need for an all-encompassing SOE legislation framework to standardise pay structure and reporting requirements. Additionally, accurate measures of performance are necessary to overcome the agency problem. Contribution/value-add: This research adds to the limited knowledge base regarding the relationship between executive pay and company financial performance in South African SOEs. It also identified the need to incorporate non-financial metrics to influence executive pay.

中文翻译：

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南非国有企业高管薪酬与公司财务绩效之间的关系

方向：高管薪酬一直在增加；但是，公司业绩并未按比例提高。这可能是由于代理问题所致，导致高管薪酬与股东期望的公司绩效不符。研究目的：本研究的目的是确定首席执行官的总薪酬与其在南非附表2国有实体（SOE）中公司的财务绩效之间是否存在关系。研究动机：文献回顾显示，有关高管薪酬与公司财务绩效之间关系的观点存在分歧。在南非进行的研究有限，尤其是考虑国有企业。研究方法/设计和方法：这项研究是定量的，使用来自南非附表2国有企业的8年二级数据进行档案研究。Spearman的等级相关性用于评估这种关系。主要发现：在考虑财务业绩的净损益度量时，观察到一种显着的弱正相关。因此，高管薪酬与公司财务绩效之间没有确定的关系，这支持了南非国有企业存在代理问题的主张。实际/管理上的影响：迫切需要建立一个包罗万象的国有企业立法框架，以标准化薪酬结构和报告要求。此外，必须有准确的绩效指标来克服代理问题。贡献/增值：这项研究增加了有关南非国有企业高管薪酬与公司财务绩效之间关系的有限知识基础。它还确定了需要纳入非财务指标以影响高管薪酬的必要性。