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Spain to limit executive pay at state-owned companies
Rajoy’s government estimates salary cuts of up to 35% as it tries to assuage public anger as well bridge €40bn budget gap
Spain’s conservative government has renewed its crackdown on executive pay in companies supported by taxpayers’ money as it obliges senior managers to share the pain of austerity.
In the third of a series of measures designed to assuage anger over tax-funded executive pay, it announced on Friday that basic annual salaries at state-owned firms would be limited to €105,000 (£87,000) – though it has left room for government-approved productivity bonuses.
This would cut the average senior executive salary by up to 35% at about 4,000 state-owned and partly state-owned firms, the right-wing People’s party (PP) government of Mariano Rajoy calculated.
“These salaries are noticeably lower than in the private sector, but they are still reasonable wages … at a time of austerity,” said the deputy prime minister, Soraya Sáenz de Santamaría.
At smaller public companies the wage caps were set at €80,000 and €55,000, including perks. The number of directors – often political appointees – was also curbed.
The Spanish government has to make a €40bn adjustment, equivalent to almost 4% of GDP, in this year’s budget.
Some €15bn has been found from spending cuts and tax rises, but further measures are expected soon – with these set to push Spain deeper into a recession. The economy is expected to shrink 1.7% his year, according to the International Monetary Fund.
Pictured: Spain’s deputy prime minister, Soraya Sáenz de Santamaría, says that executives on the public payroll are expected to share the pain of austerity cuts. Photograph: Sergio Barrenechea/EPA
