Economy, Business And Markets

Wage Ceiling for Bank CEOs

Wage Ceiling for Bank CEOsWage Ceiling for Bank CEOs

The maximum wage for CEOs and board members of state-owned banks has been approved by the parliament, putting restrictions on the notoriously high salaries of bankers.

 Mohammad Reza Pourebrahimi, a parliamentary member of the Money and Credit Council, told Nasim News that bankers are at most allowed to receive a salary seven times higher than that of an “ordinary employee.”

The lawmaker did not specify a figure for an “ordinary employee”, but the minimum wage is slightly more than 7 million rials ($212). The maximum wage, as set in the labor law, could not exceed seven times the minimum wage.

Bank CEOs and board members have been criticized in the past for holding multiple positions and receiving hefty sums in annual bonuses, leading some to think of bankers as a group with access to infinite sources of income.

The wage ceiling for private bank executives is less clear with Pourebrahimi saying that the private banks follow the limits specified by “Trade Law”. The law does not clarify any wage limits, but it states that board members can be rewarded in accordance with the quality of their services.

Pourebrahimi added that imposing salary restrictions for the private sector could be a breach of constitutional rights.  “It should take a while to see if we can oversee the implementation of Trade Law since it’s recently been passed,” he said.

The Guardian Council – the supervisory body that oversees parliamentary approval – has also announced that a time period is needed before any final decision about salaries can be made, according to the lawmaker.