Wealth Index: SA’s corporate elite – whiter than ever

The top 50 richest people in the inaugural City Press Wealth Index are worth a collective R323 billion – roughly the same as the 2017 gross domestic product of Mozambique and Namibia combined.

The corporate elite, unsurprisingly, is overwhelmingly white and male – the big surprise is that this has become much more so in the past 10 years.

The City Press Wealth Index was compiled by Who Owns Whom from company documents, announcements and share registers published between 2006 and 2018, as well as from the disclosed remuneration of JSE-listed companies’ directors for the 2017 financial year, including bonuses and severance packages.

The wealth index reveals that:

- In 2008, there were 13 black people in the top 50 wealthiest executives and board members of JSE-listed companies. Now there are five;

- In 2008, there was one woman in the top 50: mining executive Nonkqubela Mazwai. In 2018, there is also one woman in the top 50: Sygnia chief executive Magda Wierzycka

- In 2008, the average age of the top 50 was 64. Now it is 61;

- In the 2016/17 financial year, disgraced Steinhoff chief executive Markus Jooste was the highest-paid executive, earning a pay packet of salaries and bonuses totalling just over R202 million – enough to pay 4 814 people the national minimum wage for a year; and

- The second-best-paid executive, Steinhoff’s financial director Andries la Grange, earned R105.18 million, enough for 2 504 minimum wage earners for a year.

- The source of the increasing wealth of old white men, and of the corporate elite as a whole, has changed a lot over the past decade .

- The assets underpinning the top 50’s fortunes have shifted decisively away from mining with the spectacular rise of financial services companies and the appearance in South Africa of frequently speculative property investment vehicles, real estate investment trusts, pioneered in the US.

How much is R329 billion?

The top 49 wealthiest men, and one woman, could use their collective wealth of R329 billion to pay 1 million people the new national minimum wage for eight years.

It is the equivalent of 7.1% of all the pension savings in the country, based on the national balance sheet statistics published by the SA Reserve Bank.

The central bank’s data reveal that these 49 men, and one woman, could buy 12% of all the houses in South Africa – and their collective fortunes amount to almost 28% of all the money South African households have in the bank.

Most of the people on the list have massive personal shareholdings in companies which they either founded or receive shares from as part of their executive packages.

South Africa is one of the most unequal societies in the world. In 2014, Stats SA reported that the Gini coefficient, which measures relative wealth, 
had reached 0.65 – the highest in the world of countries measured – compared to the international average of 0.38. China, in comparison, scored a measure of 0.42.

• Visual produced by Code for Africa

The data:

The City Press Wealth Index is not perfect. Our list of rich South Africans is drawn exclusively from the pool of directors of companies listed on the five local stock exchanges, mostly the JSE.

That is a total of 2 600 people, some of whom have nothing to do with South Africa except happening to sit on the board of a company that has a second or third listing in the country.

The top spot goes to Ivan Glasenberg because of his 8.3% stake in Glencore, the controversial global mining and commodities group he co-founded.

Glasenberg’s wealth was on a steep upward trajectory this year until the US Department of Justice announced it was investigating corruption charges against the company related to its dealings in Nigeria, the Democratic Republic of Congo and Venezuela.

In June, Glasenberg’s shares in Glencore were worth R84 billion. This month, they fell back to R66 billion.

Glencore is a Swiss-based multinational mining and commodity trading company with South African roots, and although Glasenberg is no longer a resident of South Africa, he was born, raised and educated in the country.

Christo Wiese would have been number one if not for the implosion of Steinhoff International amid the largest accounting scandal in South African history.

Wiese lost almost exactly Glasenberg’s fortune – R65 billion – when his shares in Steinhoff collapsed late last year. Despite that, he is still worth R33 billion, thanks largely to his shares in Shoprite.

Patrice Motsepe remains the richest black South African with a R22 billion fortune. Following the overall trend, Motsepe’s wealth now consists mostly of shares in financial services company Sanlam. The gold mines that made him rich play a secondary part in his wealth.

Other familiar faces on the top 50 include FirstRand co-founder Laurie Dippenaar and business magnates Johann Rupert and Koos Bekker. Bekker’s wealth is thanks to shares in Naspers, the ultimate owner of City Press. There are several missing billionaires on the Wealth Index – a drawback of relying on JSE data when many fortunes are in the form of private, unlisted companies.

Wendy Appelbaum is said to be the richest woman in South Africa, but she has no JSE directorships.

Douw Steyn, the insurance mogul who has literally built a city named after himself, is nowhere to be seen.

The reclusive property baron Jonathan Beare, who owns Buffet Investment Services, is thought to be one of the largest private landowners in the country, yet you would be hard-pressed to find a photo of the man, let alone an easily measurable list of his assets.

We are almost certainly missing several billionaires who simply happen to not be directors of listed companies.

Where did all the black people go?

Many of the people who made the top 50 in 2008 have disappeared, wealth intact, because they resigned their directorships.

That includes President Cyril Ramaphosa, who was number 19 in 2008 with R1.4 billion in listed shares.

Lazarus Zim was number 18 in 2008 but number 71 this year, because he stepped down from the boards of Sanlam and Mvelaphanda Resources.

Former MTN boss Sifiso Dabengwa is probably worth more now than the R1.8 billion in MTN shares he had in 2008, but he no longer sits on the board, so he is invisible to the Wealth Index.

Even moguls whose wealth is largely in the form of listed companies slip through the cracks.

Iqbal Survé’s Sekunjalo is the major shareholder in African Empowerment Equity Investments and its listed subsidiary, Ayo Technology Solutions.

City Press calculates that this should squeeze him into the top 50, but Survé himself is not a director at either company.

With regard to the people we have on the City Press Wealth Index, we only have information on the value of their shares in the companies at which they have a board seat. We do not know what other shares or bonds they own, or how much property they have, or how much cash they have stashed in bank accounts. We also do not know how much they are paid for other work they do outside of the listed companies at which they have board seats. We also do not know how much debt they have.