Parliament votes to cap salaries of managers at state companies

Parliament on Thursday approved in first reading a bill capping the salaries of managers in state-run, majority state-owned and monopolist companies at three average salaries received at the company concerned, as compared to the current limit of five average salaries. The same bill limits the size of bonuses at six annual salaries, depending on the company's performance. Liberal-Democrat MP Anatolie Dimitriu, one of the authors, said the salaries of managers at state companies should correspond to the company's profitability. “Whereas average economic profitability in 2011 represented 0.8%, meaning for every 1 leu worth of assets net profit was a mere 0.8 bani, there were cases when the managers of those companies earned salaries and bonuses of nearly one million lei”, said Dimitriu. He also noted that the lack of uniformity in the current legal framework enabled some managers to offer themselves salaries as high as twenty times what their employers get on average. “A fair salary system is where managers are remunerated with a fixed salary and variable bonuses depending on performance indicators. A direct relation between the company's results and their earnings will represent an incentive for the managers to focus on the company's economic and financial growth”.