Dinkić: CEOs' pay should be performance-based

Economy Minister Mlađan Dinkić says that the salaries of public company CEOs should reflect the companies’ business performance.

Izvor: Beta

Monday, 08.12.2008.

14:49

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Economy Minister Mladjan Dinkic says that the salaries of public company CEOs should reflect the companies’ business performance. “What’s most important is to ask how much the work of a public company really costs the Serbian tax payer and what benefit they gain from it. If a company is cutting operational coats and improving the quality of its services, the management deserves good salaries,” Dinkic wrote in a article in daily Politika. Dinkic: CEOs' pay should be performance-based He said that leveling out all salaries was detrimental to success and was a great misconception, because “we are not the same, nor are all companies the same.” Dinkic said that public uproar over issue of salaries for CEOs was justified, but that it should not turn into a witch hunt against one person—former Nikola Tesla Airport CEO Bojan Kristo. “Everything turned into a witch hunt and a relentless media lynch of one man—the airport CEO. Some people, pouring oil on to the media fire, even tried to make political gain off it” Dinkic said. He said that the result of all of this had been the resignation of Kristo, who, Dinkic said, had been “one of the few CEOs that courageously and successfully restructured his company, ending several damaging agreements, cutting salaries by 15 percent compared to last year, and increasing profit fourfold.” He said that while public company heads should not have the high salaries they currently do, salaries should not all be equal either. If the state wants to leave the responsibility for large public companies in the hands of experts, Dinkic said, their salaries must be competitive in relation to the private sector. “The greatest danger for democracy is demagogy, especially in Serbia, where populism is older than democracy. Demagogy leads to a skewed system of values. In these situations people who do nothing have the easiest time because nothing is expected of them,” Dinkic said. The G17 Plus leader said that it was unnatural for the prime minister’s salary to be five times less than the deputy director of some monopolistic public company. “But, is it normal for the prime minister, on whom the situation and future of the nation depends, to have a salary that is only three times higher than the average wage in Serbia?” Dinkic asked. Mladjan Dinkic (FoNet, archive)

Dinkić: CEOs' pay should be performance-based

He said that leveling out all salaries was detrimental to success and was a great misconception, because “we are not the same, nor are all companies the same.”

Dinkić said that public uproar over issue of salaries for CEOs was justified, but that it should not turn into a witch hunt against one person—former Nikola Tesla Airport CEO Bojan Krišto.

“Everything turned into a witch hunt and a relentless media lynch of one man—the airport CEO. Some people, pouring oil on to the media fire, even tried to make political gain off it” Dinkić said.

He said that the result of all of this had been the resignation of Krišto, who, Dinkić said, had been “one of the few CEOs that courageously and successfully restructured his company, ending several damaging agreements, cutting salaries by 15 percent compared to last year, and increasing profit fourfold.”

He said that while public company heads should not have the high salaries they currently do, salaries should not all be equal either.

If the state wants to leave the responsibility for large public companies in the hands of experts, Dinkić said, their salaries must be competitive in relation to the private sector.

“The greatest danger for democracy is demagogy, especially in Serbia, where populism is older than democracy. Demagogy leads to a skewed system of values. In these situations people who do nothing have the easiest time because nothing is expected of them,” Dinkić said.

The G17 Plus leader said that it was unnatural for the prime minister’s salary to be five times less than the deputy director of some monopolistic public company.

“But, is it normal for the prime minister, on whom the situation and future of the nation depends, to have a salary that is only three times higher than the average wage in Serbia?” Dinkić asked.

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