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Ceturtdiena 20.09.2018 | Name days: Marianna, Ginters, Guntra
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Official: competitive remuneration in state enterprises is not the main goal

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Vyacheslav Dombrovskis

“The discussion concerning remuneration at state and municipal enterprises should be transparent. Competitive remuneration is not a goal in itself. It is a means of attracting the most competent managers to become leaders of state enterprises,” – believes Chairman of Saeima National Economy, Agricultural, Environment and Regional Policy Commission Vyacheslav Dombrovskis.

In addition, according to him, the management of state enterprises should be chosen by means of an open contest.

It should be added that the Saeima conceptually approved amendments to the Law on Management of State an Municipal Capital Shares and Enterprises on January 10. These amendments provide for an increase of the coefficient used to calculate the salaries for top-managers from six to ten. This will help secure competitive salaries of top-managers at state enterprises, note the authors of the draft law.

“Higher salaries will not ensure effective management in the situation when the Board of state enterprises is open to be entered b people with insufficient experience. For example, the salary of the head of Latvenergo is nearly three times lower than that of Esti Energia’s manager. At the same time, when comparing salaries at several state enterprises, we see very notable differences. The salary of Latvenergo’s manager is slightly lower than three thousand LVL. At the same time, that of airBaltic manager is nearly 20 thousand LVL per month. The salary of the top-manager of Riga Free port is nearly ten thousand LVL,” – says Dombrovskis.

The draft law provides that the coefficient in the calculation of Board members’ remuneration enterprises should not exceed 10. With that, the maximum monthly wages at the largest state enterprises could reach 4 780 LVL (currently 2 784 LVL).

Remuneration of members of the Board of state enterprises was reduced by 52% in 2009. Therefore, in order to motivate professional Board members to continue to work at state enterprises, it is necessary to review the law’s restrictions on the maximum amount of wages, note the authors.

BNN previously reported that amendments to the Cabinet of Ministers rules that provided the opportunity to increase wages were accepted based on the argument that enterprises lose specialist in competition with the private sector. Nevertheless, such significant increases surprised both PM Valdis Dombrovskis and Economy Minister Daniels Pavluts. “I never thought this would happen. I though at least some principles of reason would be used in this question,” – said Dombrovskis.

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