scholarly journals Variable executive remuneration and company performance: Insights from the Johannesburg Stock Exchange, South Africa

2020 ◽  
Vol 20 (1) ◽  
Author(s):  
Minal Naik ◽  
Nirupa Padia ◽  
Chris W. Callaghan
Keyword(s):  
South Africa ◽  
Stock Exchange ◽  
Company Performance ◽  
Johannesburg Stock Exchange ◽  
Executive Remuneration

scholarly journals Executive remuneration and company performance

2017 ◽  
Vol 15 (1) ◽  
pp. 253-264
Author(s):  
Vuyani Ndlovu ◽  
Emmanuel Mutambara ◽  
Akwesi Assensoh-Kodua
Keyword(s):  
South Africa ◽  
Performance Metrics ◽  
Stock Exchange ◽  
Methodological Approach ◽  
Secondary Data ◽  
Sampling Technique ◽  
Research Approach ◽  
Company Performance ◽  
Executive Remuneration ◽  
The Relationship

Executive remuneration has been the subject of close scrutiny, huge public outcries and criticisms in the recent past in South Africa. This has invariably attracted unprecedented research interest across different sectors of the economy. Various studies on executive remuneration versus corporate performance have been conducted across South African companies with no finite consensus. This study joins the debate with the hope of reaching common understanding on the relationship between the two variables. The study seeks to investigate the relationship between CEO remuneration and company performance on the Johannesburg Stock Exchange Listed (JSE) Companies from 2010 to 2015. In particular, the focus of the study was to determine if these two constructs were correlated and aligned with the corporate governance principles. The study, employed a deductive methodological approach, based on a longitudinal, descriptive quantitative design. Purposive sampling technique was used to select the actively listed companies that met the prescribed criteria. Secondary data, sourced from McGregor BFA database was used for the study. Data analysis took an archival quantitative research approach. Regression and time series statistical analyses were performed on secondary data on CEO remuneration and company performance metrics. The findings confirmed the existence of a positive relationship between CEO remuneration and company performance in South Africa as hinted by previous studies

scholarly journals Social Media Policies Within the Financial Sector in South Africa

SAGE Open ◽  
2020 ◽  
Vol 10 (4) ◽  
pp. 215824402097503
Author(s):  
Amanda van den Berg ◽  
Miemie Struwig
Keyword(s):  
South Africa ◽  
Social Media ◽  
Financial Institutions ◽  
Brand Image ◽  
Stock Exchange ◽  
Document Analysis ◽  
Research Process ◽  
Relationship Building ◽  
Disciplinary Action ◽  
Johannesburg Stock Exchange

The main purpose of this article is to explore the social media policies of financial institutions in South Africa. Owing to the advances in technology, businesses are exposed to many opportunities but also risks in social media platforms. For the study, a thematic framework was considered to analyze social media policies, which included risk and relationship building, brand image and reputation, stakeholders and communities, disciplinary action and compliance as well as professional and personal guidelines. A qualitative document analysis of social media policies of select South African Johannesburg Stock Exchange (JSE) listed financial institutions was then conducted. For the data analysis, a thematic document analysis using a consensual qualitative research process was applied. The results showed that all the financial institutions appreciated the value and opportunities provided by social media and ensured strict compliance to their social media policies. However, there were some financial institutions that did not focus on relationship building, did not mention brand image and reputation, did not include all stakeholders, and did not suggest personal guidelines in their social media policies.

Investigating the low-risk anomaly in South Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yudhvir Seetharam
Keyword(s):  
South Africa ◽  
Kalman Filter ◽  
Stock Exchange ◽  
Low Risk ◽  
Momentum Effect ◽  
Content Type ◽  
Share Prices ◽  
Johannesburg Stock Exchange ◽  
High Volatility ◽  
Finance Theory

PurposeRecent studies have shown that low-volatility shares outperform high-volatility shares. Given the conventional finance theory that risk drives return, this study aims to investigate and attempt to explain the presence of the low-risk anomaly (LRA) in South Africa.Design/methodology/approachUsing share prices from 1990 to 2016, various buy-and-hold strategies are constructed to determine the return to an investor attempting to capitalise on such an anomaly. These strategies involve combinations relating to a price filter, the calculation of risk and volatility, value-weighting or equal-weighting of portfolios and the window period to construct said portfolios.FindingsIt was found that the LRA exists on the Johannesburg Stock Exchange (JSE_=) when using univariate sorts, without controlling for the size or value effect. When using multivariate portfolio sorts (size and volatility or value and volatility), it was found that the LRA does not exist on the JSE under the majority of risk proxies, but particularly prevalent when downside risk is used. This loosely points towards a potential “inverse momentum” effect where low-return portfolios outperform their counterparts.Originality/valueIn general, it is established that the risk–return relationship is non-linear and deterministic under traditional proxies, but improves to being somewhat, but not completely, linear under a Kalman filter. The Kalman filter, which can be considered a proxy for learning, does not remove the anomaly in its entirety, indicating that behavioural approaches are needed to explain such phenomena.

scholarly journals The effect of industry nuances on the relationship between corporate governance and financial performance: Evidence from South African listed companies

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Jonty Tshipa ◽  
Leon M. Brummer ◽  
Hendrik Wolmarans ◽  
Elda Du Toit
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
South African ◽  
Resource Dependence ◽  
Stock Exchange ◽  
Listed Companies ◽  
Company Performance ◽  
Johannesburg Stock Exchange ◽  
Good Corporate Governance ◽  
The Relationship

Background: Premised on agency, resource dependence and stewardship theories, the study investigates empirically the existence of industry nuances in the relationship between corporate governance and financial performance of companies listed in the Johannesburg Stock Exchange. Aims: The main objective of the study is to understand the relationship between internal corporate governance and company performance from the perspective of three distinct economic periods, as well as industry nuances, cognisant of endogeneity issues. Setting: South Africa, as an emerging African market, offers an interesting research context in which the corporate governance and financial performance nexus can be examined empirically. Method: A sample of 90 companies from the five largest South African industries, covering a 13-year period from 2002 to 2014 (1170 firm-year observations) was examined with three estimation approaches. Results: Two key trends emerged from this study. First, the relationship between corporate governance and company performance differed from industry to industry. Second, the association between corporate governance and company performance also changes during steady and non-steady periods, which is an indication that the nexus is driven by the state of the global economy and the type of the industry. Conclusion: Evidence from the study suggests that companies should be allowed to optimise rather than maximise their corporate governance options. This finding questioned the approach of the recently published King IV Code of Good Corporate Governance, which requires Johannesburg Stock Exchange-listed companies to ‘apply and explain’ as opposed to ‘apply or explain’ as pronounced by King III Code of Good Corporate Governance.

scholarly journals Discretionary disclosures: reactivity and proactivity in the chairpersons’ statements of JSE-listed companies in South Africa

2016 ◽  
Vol 14 (3) ◽  
pp. 512-521
Author(s):  
Nthabeleng Mmako
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Environmental Factors ◽  
Stock Exchange ◽  
Jel Classification ◽  
Review Of The Literature ◽  
Corporate Reporting ◽  
Johannesburg Stock Exchange ◽  
Starting Point ◽  
Good Starting Point

A review of the literature on corporate governance and narrative disclosures highlights the need for assessment of the formulation of the chairperson’s statement. This research is justified as corporate reporting today is more integrated. The significance of the study may be that even though only the chairperson’s statement is investigated, it may be a good starting point for understanding how change is ushered into an organization and from what perspective this takes place. Findings of content analysis of 100 Johannesburg Stock Exchange (JSE)-listed chairperson’s statements suggest that as part of the communication intended mainly for investors and other stakeholders of the company, the chairperson’s statement is written as a reactive statement to environmental factors or as a proactive statement to counter environmental factors that may affect or have affected the company’s performance. This study will be useful in helping readers to improve their understanding of a company’s efforts to communicate with them, from the chairperson’s perspective. Keywords: chairperson’s statement, JSE, disclosures, reactivity, proactivity. JEL Classification: G3, G30

scholarly journals Against the Herd: Contrarian Investment Strategies on the Johannesburg Stock Exchange

2014 ◽  
Vol 6 (2) ◽  
pp. 120-129
Author(s):  
Prince K. Sarpong
Keyword(s):  
South Africa ◽  
Stock Market ◽  
Mutual Funds ◽  
Opposite Direction ◽  
Mutual Fund ◽  
Stock Exchange ◽  
Superior Performance ◽  
Johannesburg Stock Exchange ◽  
Herd Behaviour ◽  
Over Time

This study seeks to investigate herd behaviour among equity mutual fund managers and the performance of mutual funds that trade against the herd in South Africa. The behaviour of mutual funds has an effect on the stability and volatility of stock markets, the ultimate returns to the investors. The study builds upon the efficient market hypothesis, portfolio theory and behavioural finance to provide evidence of the behaviour of mutual funds in an emerging market context using the Johannesburg Stock Exchange. The Lakonishok, Shleifer and Vishney (1991) measure of herding is used to ascertain the behaviour of mutual funds over the period 2006 to 2012. Institutional investors in South Africa are susceptible to the behavioural bias of herding and this phenomenon influences the performance of their funds. Funds that trade in the opposite direction of herd funds are able to put up a superior performance over time. Superior performance, however, does not entice mutual fund investors to invest less in under-performing funds and more in funds that recently show superior performance. These findings imply that following investment waves does not culminate in superior returns in the stock market. Consequently, mutual funds that take an opposite direction to herd funds help stabilize the stock market and lessen the severity of bear markets. This study categorizes mutual funds into ‘herding’ and ‘contrarian’ and provides an insight into the performance of each category. Investors who oppose herd behaviour realize greater returns over time while stabilizing the markets at the same time.

scholarly journals Strategic Technology Management As A Causality To South African Company Performance

2015 ◽  
Vol 14 (6) ◽  
pp. 815
Author(s):  
Theuns G. Pelser
Keyword(s):  
Technology Management ◽  
South African ◽  
Stock Exchange ◽  
Basic Research ◽  
Probability Judgment ◽  
Innovation Strategy ◽  
Company Performance ◽  
Technology And Innovation ◽  
Johannesburg Stock Exchange ◽  
Performance Dimensions

Cutting edge technology management goes beyond basic research and development (R&D). Increasingly, corporate strategists are making a more precise distinction between “technology” and “technology management.” The main purpose of this study was to develop an empirically derived classification system (taxonomy) for sustaining industry leadership, through the relationships that exist between technology and innovation strategy, technology management and company performance. A non-probability, judgment sample of companies listed on the Johannesburg Stock Exchange (JSE) were taken. Seminal research studies were used to identify a set of technology strategy, technology management and innovation strategy dimensions. Four distinct technology factors obtained with the analysis, were proved to positively influence the company performance dimensions and were classified as Control Market Planning, Product Development Intensity, R&D Commitment and Technology Focus factors. As a result a conceptual model has been developed to demonstrate the integrated properties of this new proposed taxonomy of technology and innovation. The results show that strategic technology management choices can significantly affect company performance.

scholarly journals Factors Influencing the Extent of Corporate Compliance with International Financial Reporting Standards in South Africa

2021 ◽  
Vol 11 (12) ◽  
pp. 965-984
Author(s):  
Unity Maqeda Putsai ◽  
Msizi Mkhize
Keyword(s):  
South Africa ◽  
Financial Reporting ◽  
Stock Exchange ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Financial Reports ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Johannesburg Stock Exchange ◽  
Compliance Level

The main objective of this study is to investigate the effects of company attributes on compliance with International Financial Reporting Standards (IFRS). The study used a sample of 46 listed companies on the Johannesburg Stock Exchange (JSE) covering the period from 1993 to 2017. With an average compliance level of 88.21304, it is concluded that South Africa’s listed firms have significantly complied with IFRS 1. Using panel data to analyze the effects of company attributes, size and leverage have a significant positive effect on IFRS 1 compliance. On the other hand, the coefficients of Earnings Per Share (EPS) and Return on Total Assets (ROTA) are negative and significant. This similarly implies that ROTA and EPS are important factors driving the compliance level of the companies in South Africa with the IFRS 1 disclosure. EPS and ROTA also exhibit an inverse relationship with the compliance level. Carrying out a longitudinal study helps to produce more recent evidence on the quality of IFRS financial reports in South Africa. The outcome of the study is beneficial to international literature as it provides enough evidence on the benefits of adopting IFRS adoption.

scholarly journals Take-over announcements and insider trading activity on the Johannesburg Stock Exchange

1987 ◽  
Vol 18 (4) ◽  
pp. 198-208 ◽  
Author(s):  
N. Bhana
Keyword(s):  
South Africa ◽  
Insider Trading ◽  
Abnormal Return ◽  
Stock Exchange ◽  
Third Parties ◽  
Inside Information ◽  
The Public ◽  
Public Announcement ◽  
Johannesburg Stock Exchange ◽  
Announcement Date

The objective of this study was to carry out an investigation into the abnormal return behaviour of a sample of 50 acquired companies on the Johannesburg Stock Exchange during the period 1976-1985. Insiders appear to take market positions on prospective take-overs approximately 40 trading days before the announcement, and there appears to be uncontrolled abuse of insider trading rules in the 15 days immediately prior to the take-over announcement date. Legally defined insiders were not responsible for the abuse of inside information relating to the proposed take-overs. It would seem that substantial insider trading is carried out through third parties in order to escape detection of the authorities. The JSE appears to be inefficient in reacting to the public announcement of a planned take-over, and Section 233 of the Companies Act which regulates insider trading in South Africa is clearly ineffective. Various deficiencies and loopholes in the existing legislation are identified and recommendations for amendments are suggested.

scholarly journals Hostile take-overs: A review of defensive techniques currently used by target companies

1984 ◽  
Vol 15 (1) ◽  
pp. 53-56
Author(s):  
N. Bhana
Keyword(s):  
South Africa ◽  
Stock Exchange ◽  
The United States ◽  
Policy Implications ◽  
Business Managers ◽  
New Techniques ◽  
Golden Parachute ◽  
Johannesburg Stock Exchange ◽  
Business Concentration ◽  
New Strategies

Take-overs of companies are being increasingly used as a means of business growth. Take-over candidates are decreasing and acquiring companies are becoming more aggressive in pursuing take-overs. The target companies have retaliated by using several new techniques to avoid hostile take-overs. Anti-take-over amendments to the company's Memorandum and Articles of association, 'golden parachute' arrangements, and the simultaneous bid for the acquiring company are being extensively used to defend hostile take-overs. The controversial nature of these new strategies has provoked heated academic debate as well as emotional arguments between business managers and shareholders. The high cost of implementing the new strategies to defend take-overs has generated much adverse publicity in the United States. By contrast these new techniques have not found widespread use in South Africa. It can be expected that at some stage in the future these techniques will be implemented by the target companies in South Africa. The public policy implications of using these techniques are discussed in this article. The need to provide guide-lines on the use of new strategies to defend hostile take-overs is recommended. The listed companies in South Africa are instrumental in undertaking major take-overs resulting in increased business concentration. It is recommended that the Johannesburg Stock Exchange should provide guidelines on acceptable methods to defend hostile take-overs.

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