The Slovenia Times

Cerar Says Govt Will Take Measures over Excessive Pay at BAMC


Finance Minister Dušan Mramor has meanwhile called on the bad bank to fully harmonise pay with the government's recommendations.

"I demanded from the finance minister to immediately check...whether this information is true," Cerar told the press on Tuesday on the sidelines of his visit to the UN General Assembly session in New York.

Only two days ago Cerar indicated that the government would not undertake immediate staffing changes at the Bank Asset Management Company (BAMC) despite a recent Court of Audit report that found continued governance shortcomings, but added that it planned to put in place additional rules.

The daily Dnevnik reported last week about unusually large payments made at BAMC in the last nine months. One was allegedly a EUR 71,000 transfer to a foreign account held by an individual.

Commercial POP TV has meanwhile reported that BAMC management board head Lars Nyberg had signed an annex with chief executive director Torbjörn Mansson raising Mansson's pay from EUR 20,500 to EUR 36,900, despite the government's pay cut guidelines.

A subsequent report by public broadcaster RTV Slovenija said the pay increase was implemented retroactively for pay prior to the pay cut accepted by Mansson following government intervention in March.

Mansson's base salary was reduced to EUR 17,000 gross from EUR 20,500 in March, although the cut did not include performance bonuses. The pay of other directors was cut by around half.

The issue was highlighted by the Court of Audit in a follow-up report last week, which said that the government had failed to bring pay policy at BAMC in line with the guidelines for executive pay in key state-owned companies, leaving room for bonuses based on vague criteria.

Cerar said in New York yesterday that the government would not wait for the terms of the executive directors at BAMC to expire but would take measures if the reports were true. "Then there is no waiting," he said, calling on the public to be patient.

"If it turns out that the directors of the bad bank circumvented the law and paid themselves excessive salaries...or even did something corrupt, we will take very strict measures against this," the prime minister said.

Finance Minister Mramor has written to BAMC asking it to fully bring the pay policy in line with the guidelines for executive pay in key state-owned companies.

It subsequently emerged that Mramor met today the non-executive members of the DUTB management board, including the president Lars Nyberg, who informed the finance minister that all payments to non-executive members were fully in line with the government remuneration policy.

Addenda were also reached with the executive directors which bring fixed pay into line with the policy, although the question remains about the performance based part. Mramor had said yesterday that the board must make sure that this is also in line with the government rules.

The opposition United left (ZL) meanwhile called for an extraordinary sessions of the parliamentary Finance and Monetary Policy Committee, the Commission for Public Finance Oversight and the National Assembly as a whole to discuss the issue.

Its deputy group head Luka Mesec told the press today that the party was critical of the BAMC management for failing to bring remuneration policy in line with the government's guideline. "The management of BAMC would have to step down over this," he added.

"This is a public institution responsible for EUR 1.8bn in public money," Mesec said, adding that the party wanted to call on the government at the extraordinary sessions to take measures and harmonise the remuneration policy at BAMC within a month.

A section of the coalition is also extremely critical of the developments at BAMC. The coalition Pensioners' Party (DeSUS) said that the BAMC management can no longer be trusted and must therefore be replaced. BAMC has turned into a "state within a state", the party said.

The smallest coalition party, the Social Democrats (SD), meanwhile called for "heightened supervision" at BAMC. MP Matjaž Han said that the coalition and opposition should join forces to take measures.


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