Social Democrats turn spotlight onto high wages of state company bosses

Fat cat wages at Czech state controlled companies during the economic crisis have been pushed into the limelight by the main opposition party, the Social Democrats. Party bosses say some of the pay packets now being admitted by top managers of state firms are excessive and have called for the incoming caretaker government of Prime Minister Jan Fischer to tackle them. Chris Johnstone has the details.

High wages at state run companies hit the headlines recently when the boss of the state rail company České Dráhy, Petr Žaluda, admitted in an interview that his monthly wage totalled around half a million crowns or around 25,000 dollars. That is around 20 times the average Czech wage. The boss of power giant ČEZ, Martin Roman, confirmed his wage is around the same ball park figure. The boss of the state forestry company earns around 285,000 crowns a month and the post office boss around 250,000 crowns.

Social Democrat leader Jiří Paroubek says such wages were set at time of high growth, they do not now correspond to the state of the overall economy, the results of the companies concerned and the need to make savings. He suggests the wages be cut by a third or half.

His call has been echoed by the Social Democrat head of the central Bohemia region David Rath who has threatened cutting regional subsidies for rail services if the wages of the rail boss are not reduced.

But Czech Association of Managers board member, Luděk Pfeifer, says the level of current Czech state sector pay is not out of line.

“Well, I would not say it is excessive. I would just say it is just at the normal level compared with other state-controlled companies in EU countries. I would not say there is an excess, no.”

Mr Pfeifer, who runs both a biotechnology and consultancy company, says average management wages in the private sector are around 100,000 crowns a month but are often at least doubled when performance bonuses are taken into account.

“The very, very average level of the total target cash, I mean total earned in the year, goes from 2.0 million to 3.5 million Czech crowns altogether. And it is divided 50-50 to base and to bonus”

Mr Paroubek’s demand for wage cuts at the top of state firms has stirred accusations of crude populism. But the attacks from the main centre-right party, the Civic Democrats, have been muted. Their transport minister Petr Bendl has suggested that railways managers’ wages fall 15 percent because of poor results.

Meanwhile the head of the statistical office and incoming Prime Minister, Mr. Fischer, has noted the Social Democrats’ wage demand but preferred for now to steer clear of this particular numbers game.