President Hassan Rouhani on Tuesday said new regulations related to the salaries of top officials and executives, obliging all government and affiliated bodies to disclose the salaries of their CEOs and managers. Rouhani called for quick measures for improving current regulations on openness and transparency in state bodies.
“Leaked payslips [exposing exorbitant pay plus bonuses] have disturbed the public opinion in recent weeks… I praise the media and the people for caring about the issue. The government will use this opportunity to promote a framework of transparency of information,” the government’s website quoted him as saying in a message to the public late Monday.
Over the past several weeks, mass media have published the payslips of top managers at banks and other companies, showing their remuneration to be dozens of times the average monthly income of an urban household which is about $650.
The scandal has provoked widespread public wrath and compelled statesmen and policymakers to respond and address concerns about the deep income inequality.
“I don’t have a friendship pact with anybody,” said the president noting that his government would continue fighting corruption until it is eradicated.
Rouhani had earlier tasked Vice-President Eshagh Jahangiri to form a special committee to look into the root causes of the inflated paychecks, take appropriate measures for restoring the excessive payments to public coffers and propose reforms to regulations.
“The committee’s report pinpoints the inefficiency of previous policies and regulations about the Comprehensive Payment System. The report also blames cumbersome rules and structures, not upholding regulations and lack of effective supervision,” Rouhani said.
He also pointed to hasty implementation of regulations in previous the administration and said, “Setting fixed salaries for certain organizations without considering their duties and exempting a couple of organizations from the pay ceilings resulted in irregularities.”
Rouhani has asked his Cabinet members to fully monitor executives’ salaries, saying “they will be held responsible in future” if similar or other related problems emerge.
He also banned senior executives to sit on boards of subsidiary companies overseas. “In emergency cases, they are not allowed to receive any perks for holding such positions.”
CEOs are also barred from simultaneously holding two positions, the president noted.
“All governmental bodies have to set salaries in accordance with the Salaries and Payments Council regulations,” he said adding that the precise wages must be published on the website of the Management and Planning Organization plus on each organization’s own website.
The chief executives of four public banks were sacked last month as part of a broad government campaign to crack down on undeserving astronomical salaries, bonuses and perks.
Earlier this week, a directive was issued by the Economy Minister Ali Tayyebnia, devising a cap for the income of bank CEOs as well as banning them from taking interest-free loans as was the practice before.
As part of the directive, no bank executive can receive a salary higher than 195 million rials ($6,347).
Mohammad Ibrahim Moghaddam, Tejarat Bank’s CEO could be named as one the CEOs who was cleared of any wrongdoing.
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Farhad Tajari, a senior lawmaker, welcomed the president’s initiative, calling it “logical and worthy of respect.”
“It was a wakeup call for all those who were neglecting regulations due to the special kinships or connections they have,” he said.
The lawmaker was of the opinion that the move to check top-level salaries would be a landmark in Rouhani’s career.
Mohammad Reza Fayyaz, deputy minister of industries, mining and trade, said his ministry will soon implement the regulations and declare the income of its directors.
“The president’s declaration will help calm public opinion,” he said.
Ahmad Tavakolli, a former senior conservative lawmaker, also praised Rouhani for the declaration. “There are many positive points in the declaration, it raises hope among the public.”
