Maximum wages in the public sector: the governor of the Bank of Lithuania is not inferior to energy Business

Outraged by the remuneration of the President of the Council of the Bank of Lithuania, Vito Vasiliauskas, the Seimas members did not forget this topic and hope to return to it in June.

How 15 minutes The author of this initiative, Liberal Kęstutis Glaveckas, said that a response is currently expected from the European Central Bank on whether the Lithuanian Seimas can reduce the salary of the President of the Council of the Central Bank on his own initiative.

“When we receive an answer, we will address the question. If the Seimas cannot be controlled, I think so, although other opponents say it cannot, then we will try to adjust the salary for the next term when the new president of the board arrives. We did the same before the last crisis, “explained K. Glaveckas.

The idea of ​​V. Vasiliauskas’ salary was mainly due to the reduction of their salaries to politicians who did not yield, due to the fact that they exceeded the salaries of all Lithuanian leaders, both the President, the Prime Minister or the President of the Seimas .

According to data from the Bank of Lithuania, V. Vasiliauskas’ salary in 2020 In the first quarter, it amounted to almost 111836 euros “on paper” or 7161 euros in hand.

“No one has such a salaried salary. The salaries of the members of the Board of the Bank of Lithuania are more than 10 thousand. EUR, when the salary of the President – 7.5 thousand. (9680 euros – 15 minutes Note), the President of the Seimas – 4 thousand. Is that what you propose to reduce for everyone? ” K. Glaveckas was asked whether he should not speak about a general reduction in wages when proposing such an initiative.

No one has such a salaried salary, – says K. Glaveckas.

However, has the salary of the head of the Bank of Lithuania in the public sector really broken the entire limit? As revealed 15 minutes Data collected on wages in the public sector, V. Vasiliauskas’ salary is currently the highest, but not so exceptional. Public company managers receive similar salaries, especially in the energy sector. And some of them earned higher wages in 2019.

Experts in search and selection of experts 15 minutes He argued that the position of Chairman of the Council of the Bank of Lithuania is equivalent to the position of manager of a private bank, therefore, his salary should not be compared to the salaries of politicians who do not have the competence to manage companies of this caliber, but with managers with similar experience. It is true that in a state company it is still smaller than in a private company.

Last year, network boss Amber earned more

To learn about the highest salaries in the public sector, we collected the salaries of the heads of almost 100 state institutions, agencies and state companies in 2019 and the first quarter of 2020 from the companies’ websites.

This 15 minutes The analysis carried out in In the first quarter of 2006, the President of the Board of the Bank of Lithuania, Vitas Vasiliauskas, received the highest salary, amounting to 11.8 thousand LTL. on paper.

It is true that in 2019, the salary of the President of the Council of the Bank of Lithuania, who received a similar salary, was not the highest. How 15 minutes According to the Bank of Lithuania, no bonuses are paid to Board members, while the remuneration of Litgrid and Amber network executives increased due to annual bonuses and last year exceeded V. Vasiliauskas’ salary.

The second highest public sector salary in 2020 was replaced by Daivis Virbickas, CEO of Litgrid, whose base salary is 9,860 euros before tax.

It is true that in 2019, the head of Litgrid obtained the second largest salary in the public sector, surpassing even the president of the LAC Board, including the variable part paid for the results of 2018, the real salary of D.Virbickas rose to 12.5 thousand. EUR per month before taxes, or 7.5 thousand. euros in hand.

Third on the list in terms of salary received is President Gitanas Nausėda, whose salary in the first quarter of 2020 amounted to € 9,680 before tax, or € 5,856 after tax.

In the fourth, the salary of Darius Maikštėnas, the General Director of the Ignitis Group, which amounts to 9588 euros (it is indicated that no bonuses were paid).

And the first five are completed by Vidmantas Paukštė, the acting head of the Klaipeda State Port Authority, who earns € 9,496 before tax.

Nemunas Biknius, CEO of Amber Grid, is in sixth place, earning 9,342 euros in the first quarter of 2020. N. Biknius became the head of the Amber network in April of this year, and until then, from October of 2019, when he replaced the resigned Saulius Bilius, was the head of the company temporarily.

In 2019, the position of Amber network administrator was the highest paid in the entire public sector, including the variable part of the salary, the average monthly salary of an Amber network administrator was 13,890 euros “on paper”, or 8403 euros per hand.

Seventh, more than 9 thousand. Mantas Bartuška, director of Lietuvos Geležinkeliai, received a pre-tax salary in the first three months of this year.

The monthly remuneration established by the Director General of Lithuanian Railways in 2019. December 31 was € 9,305, but the actual average salary of the CEO in 2019, taking into account the annual incentive, was € 11,550.

Why are the highest salaries paid to energy professionals?

Lives Danielius, Head of the Management Coordination Center (NCC), which coordinates the activities of Lithuanian state companies 15 minutes He commented that large state-owned companies, especially in the energy sector, differ in terms of wages as they implement projects of national importance.

“Companies like Litgrid, Ignitis group and Lithuanian Railways carry out large, extremely important and particularly complex projects. These companies are important in guaranteeing national security and providing critical services throughout the country, for example, transmitting or generating electricity, ”said V. Danielius.

Companies such as Litgrid, Ignitis Grupė and Lietuvos Geležinkeliai are implementing large projects of special importance and are important in ensuring national security, said V. Danielius.

And Šarūnas Dyburis, the managing partner of management selection company AIMS Lietuva, adds that energy managers often compete internationally in the market.

“The salaries of managers of energy companies are higher because these companies operate in a very competitive segment. They often compete for the best people not only with other Lithuanian companies (public and private), but also with other companies in the region. At a European level, energy company wages are actually higher on average “, 15 minutes S. Dyburis said.

Salaries are inflated by bonuses

The managers of other large state-owned companies also rank in the top ten in terms of wages.

Darius Šilenskis, CEO of Klaipedos Nafta, since 2019. November The company’s board of directors establishes a monthly salary of 9,200 euros.

Ninth was held by the head of the Lithuanian Post Asta Sungailienė, who earned 8,800 euros in salary before taxes.

Valdas Kaubrė, Director General of the State Forest Company, also joined the top ten, receiving a salary of 8,438 euros “on paper”. V.Kaubrė was appointed to this position in November 2019.

The managers of other state companies earn much less. For example, Baltpool CEO Andrius Smaliukas in 2020. He received a pretax salary of € 5,974 in the first quarter and € 7,228 in 2019, including bonuses. Invega CEO Kęstutis Motiejūnas earns almost 6,000. salary before tax

Commenting on the differences in managers’ salaries in the public sector, V. Danielius emphasized that the SOE chief’s remuneration is determined by many different factors: the volume of the company’s activities, the number of employees, the complexity and complexity of activities, bonuses or variable remuneration.

“The variable amount of compensation can form a fairly significant part of total compensation, therefore, managers’ salaries may fluctuate from year to year and, depending on the results, may be higher in one year and lower in others, “explained V. Daniels.

According to him, the remuneration policy established by the Government also has an impact, since the remuneration of the heads of state companies is regulated according to the procedure established by the Government.

Salaries of heads of institutions: 4–5 thousand. euros

The salaries of politicians and heads of state institutions are much more modest than those of state companies.

From V. Vasiliauskas, the highest salaries of the heads of state institutions in 2020 In the first quarter, the Auditor General received 6,225 euros before taxes and Inga Žilienė, President of the State Energy Regulatory Authority (VERT), received 5,956 euros.

More than 5 thousand. Prime Minister Saulius Skvernelis (€ 5766), VERT Vice Presidents Jonas Makauskas and Renatas Pocius (€ 5658), Chancellor of the Ministry of Finance Giedrius Rimša (€ 5638), the head of the State Tax Inspectorate Edita Janušienš (€ 5359) ), Chancellor Algirdas Stončaitis (5,330 euros), the Minister of Foreign Affairs, Linas Linkevičius (5,321 euros), the Minister of National Defense, Raimundas Karoblis, and the Minister of the Interior, Rita Tamašunienė (5068 euros).

It is true that these salaries may be higher because neither the institutions nor the ministries provide information on bonuses or bonuses.

The salary of the president of the Seimas Viktoras Pranckietis reaches 4,541 euros before taxes, or 2,747 euros in the hands, and the member of the Seimas – 3,414 euros “on paper”, or a little more than 2,000. to the weapons.

Incidentally, although state agencies are required to provide executive salaries, some agencies do not disclose this information, such as the Environmental Protection Agency, the Fire and Rescue Department.

The private sector earns more

Public sector salary levels are a constant source of passion in society. Although this time the Seimas members were outraged by the salary of the President of the Council of the Bank of Lithuania, previously it was said that the managers of state companies also receive excessive wages.

The main argument is that these managers, unlike the private sector, where they have to navigate the company in the face of fierce competition, often come to lead a company with a monopoly position.

Currently, the salaries of managers of state-owned companies are significantly lower than those of comparable market companies and represent only about 40-60 percent of the market average, says V. Danielielius.

Meanwhile, executive search experts argue that in the public sector, only a few executives have salaries similar to those paid by private companies, and most are still lower than in the private sector, making it easier to attract professionals from private businesses.

V. Danielius provides estimates that the salaries of managers of state-owned companies are currently significantly lower than those of comparable market companies and represent only about 40-60 percent of the market average.

“We note that the higher the SOE, the greater the difference with wages paid in the market. It should be noted that some state-owned companies are among the largest companies in the country; for example, Ignitis group and Lietuvos Geležinkeliai are among the 10 Most valuable companies in Lithuania Analyzing the remuneration of the managers of these companies, they should be compared to the largest companies operating in Lithuania, ”says V. Danielielius.

According to him, the challenges of competitive executive compensation in the SME sector often face other countries too: reviews by the Organization for Economic Cooperation and Development often mention that the remuneration of managers of SMEs in Member states is often lower than the market average.

“According to our data, the salaries of heads of state-owned companies in Scandinavian countries are also slightly below market averages, but the differences are not as great as in Lithuania,” said V. Daniels.

Management selection experts also mention lower wages in the public sector. Andrius Francas, partner of the recruitment company Alianza para la recruitment. 15 minutes He provided an example: Litgrid-like companies with more than 300 employees and who earned 19 million in 2019. Net profit, the manager of a private company would receive 8-10 thousand euros. to the weapons.

We will remind you that the head of Litgrid earns around 6 thousand. euros in hand. It is true that with supplements, your salary can reach about 7.5 thousand. per month, then the difference is not that big.

According to A.Francas, V. Vasiliauskas’ salary is not equivalent to the salaries of managers of private banks. “The salary of the governor of the Bank of Lithuania is definitely lower. If we wanted to find that person among the managers of the commercial banks that currently operate, the Lithuanian state would certainly not buy any of them, ”added A. Francas.

Karolis Blaževičius, the head of the Indigroup employee search company, also agrees with him, noting that the basic salaries of bank managers operating in Lithuania could reach 15-20 thousand. euros on paper, plus various bonds. It is true that K.Blaževičius evaluates the Litgrid manager’s salary with a variable part as a competitive salary.

However, since salaries are generally lower in the public sector, recruiting experts agree that finding a professional manager who reaches the public sector is much more difficult. And not only because of lower wages, managers of state-owned companies also have to endure political pressure.

In the public sector, the ears of many politicians, each party is trying to get involved, why top managers are reluctant to choose the public sector, Francas explained.

“In the public sector, many politicians have heard: all the parties are trying to participate. You never know where their interests will be, what they will have to face, because they all want to work in the most professional way possible and that nobody interferes,” said A .Francas, concluding that managers choose to work in the public sector not for money, but to contribute to positive change.

Does the head of LAC earn too much or the president too little?

In the opinion of executive search experts, the discussion that the Bank of Lithuania’s Governor’s salary is too high, since it exceeds the President and Prime Minister’s salary, has not taken place since then. K. Blaževičius emphasized that in the private sector many middle managers receive a higher salary than the president.

“In my opinion, the president’s salary is ridiculous: the salaries of other state institutions and companies should not be compared or lowered according to the salaries of the prime minister or president, which are low. Sometimes they are so small due to attitudes If it is argued that the president’s salary should be the highest of all salaries, it should be increased because it is too low. If we don’t think it is too small, it should not be compared to other salaries, because these are different things, “he says K. Blaževičius.

In my opinion, the president’s salary is ridiculous: the salaries of other state institutions and companies should not be compared or lowered according to the low prime or president salaries, thinks K. Blaževičius.

R.Francas does not agree that the head of state companies or the Bank of Lithuania earn less than the president. In his opinion, the president’s salary can be seen in the context of the salaries of politicians rather than professionals in the field of management.

“The salaries of politicians must be compared with those of politicians and managers with those of managers, because the President will not work for the position of Governor of the Bank of Lithuania. Furthermore, the president has a different status: his life is equipped, He has protection, additional budgets for his office, so there is no need to say absolutely that the president is God and that no one can earn more. There really are many people who earn more than the president in the non-governmental sector, “he is convinced. executive search expert.

The salaries of politicians must be compared with those of politicians and managers with those of managers, because the President will not work for the post of Governor of the Bank of Lithuania, A. Francas is convinced.

Labor market experts also say they are unaware of the call to cut the wages of a single public sector manager. “In this case, it is necessary to review the salaries of all the institutions and reduce them proportionally, and not reduce them at the expense of one person,” says A. Francas.

And K. Blaževičius noted that after such an act in the private sector, the manager can simply quit his job. “It just came to our attention then. And if V. Vasiliauskas leaves, what would we do then?” – K. Blaževičius considered it.

The LAC manager’s salary is one of the lowest in the EU.

However, K. Glaveckas disagrees with this opinion: according to him, CEOs of state-owned companies seek profit, and the chairman of the board of the Bank of Lithuania joins the elite circle of key decision makers, therefore, your salary should not exceed.

“The chairman of the Board of the Bank of Lithuania should be equated with them, and not with the heads of state-owned companies, which run high-turnover, high-profit companies. I’m not jealous or anyone, but such an adjustment of the salary of the head of LAC is possible “, – my politician.

I’m not jealous or anyone, but such a correction of the salary of the head of LAC is possible, – K. Glaveckas comments on his initiative.

He bases his proposal on the fact that with the beginning of the crisis in 2008, the salary of the President of the LAC Council increased from 19 thousand. LTL (EUR 5.5 thousand) to LTL 13 thousand. EUR with appendix – more than 40 thousand. LTL.

“State-owned companies are for profit, if they function well and earn a lot, those wages are proportional. LB’s contribution to the budget: 12 million. Net profit balance of € 6 billion managed capital. And state companies do not contribute 12 million per year, and a billion or a half trillion, including taxes paid. The orientation of state-owned companies is completely different from that of LAC, whose objective is to maintain price stability, “compared K. Glaveckas.

It is true that in 2017 Bloomberg announced that the salary of the Governor of the Bank of Lithuania V. Vasiliauskas is the lowest among the governors of all European central banks.

SOE manages all our assets

Going back to wages in the public sector, Š. Dyburis concludes that it is very important to attract talented managers to these positions, especially state-owned companies, which often manage the great assets of all of us.

“The well-being of the entire state also depends on it: after all, these companies pay a large part of the taxes and supplement the budget with dividends. In addition, we must take into account the need for honesty and objectivity: these companies manage a large amount of our assets and we must strive to create conditions for their employees so that none of them wants to abuse their duties, “concludes Š. Dyburis.

Therefore, the salaries of executives of the largest, most profitable and successfully competing state-owned companies should not surprise us. It is true, with one essential condition, that they have in fact become organizations at the international level and not, as has been the case in the past, a refuge for family and friends of politicians in power.