Business News

Survey Finds Exec Pay Down in 2009

Ljubljana, 17 November (STA) - A survey by two associations representing executives found that the pay of Slovenian managers fell in 2009. Management boards earned an average of EUR 396,400 last year, down from EUR 437,300 a year earlier.

The survey by the Association of Supervisors and the Manager Association found that management pay fell for the first time in years in 2009.

While pay in 2009 was 24% above that in 2006, it was down around 10% on 2008. The survey found that variable pay fell the most.

The share of variable pay in total earnings stood at 4.2% in 2009, which is down on 24.4% in 2008 and 19.2% in 2007.

Serjega Slapnicar of the Ljubljana Faculty of Economics, which carried out the survey for the organisations, said this showed that companies were adjusting to the economic conditions in the country.

Moreover, the survey found that executive pay was falling compared to average pay at companies. While managers earned 9.8-times average gross pay at a company in 2007, this ratio fell to 8.7 in 2008 and 7.3 in 2009.

Due to progressive taxation, the ratio of net earnings received by managers compared to average pay at a company stood at 5.4 in 2009.

Slapnicar said these were "very moderate ratios, which are by no means excessive".

The best paid management board in Slovenia in the past three years was that of drug maker Krka, which earned an average of EUR 2.1m a year.

In 2009, the management board of home appliance group Gorenje was second in earnings with EUR 1.29m, followed by telco Telekom Slovenije with EUR 1.16m.

Meanwhile, the survey also found a large fall in earnings by supervisors in the years examined.

While the combined average earnings of supervisory boards at companies amounted to EUR 103,600 in 2007, they fell by more than 40% to EUR 60,300 in 2009.

Supervisors in Slovenia earned an average of 51-times less than a management board member in 2009. In 2007, this ratio was at 26.5:1.

Executive Director of the Manager Association Sonja Smuc pointed out that this ratio stood at 12:1 in the EU.

Borut Bratina, a professor at the Maribor Faculty of Economics and Business, criticised the supervisory pay as inadequate.

The question that this raises is whether supervision is needed and whether it is worth only so little, Bratina added.

The survey was hailed by chairman of the SKB bank Cvetka Selsek, who said it will help bring down taboos about executive pay.

She called for transparency in management pay in Slovenia, saying this would contribute to better business practices.

The Association of Supervisors meanwhile called on the government to regulate pay of supervisors in special code adopted by the new State Asset Management Agency when the current government decree from January 2009 runs out at the end of the year.

Moreover, the association warned that the legal caps on pay of managers at state-owned companies adopted by the government were not appropriate and should be abolished.

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