Romanian Government Scrutinizes Exploding Allowances for State Company Directors
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A growing controversy surrounds the compensation packages of directors at Romanian state-owned companies, with the government signaling a desire for greater accountability and restraint. Recent scrutiny has revealed significant increases in allowances, prompting calls for intervention from both legal and ethical standpoints.
A senior official stated that a recent review of director allowances – conducted just this week – revealed a concerning trend. The official specifically cited examples within the transport sector, including Kogălniceanu Airport, Otopeni airport, and Romasta, where “the management’s allowances exploded.”
Allowance Increases Reach 40-50%
The increases in these allowances are significant, reportedly ranging from 40% to 50%. Despite the significant sums involved, the official indicated ther is little concern among those receiving the benefits about public disclosure. “They prefer to stay at the limit until you can no longer block their budgets,” the official explained, “they are not interested in that, instead of returning to some decent allowance values.”
The government appears to be exploring multiple avenues for addressing the issue. If legal mechanisms prove insufficient, the official suggested that “common sense could force them or the ministry to put a pressure on them, because effectively they defy people.”
Performance Disconnect Fuels Concerns
A core concern highlighted by the official is the lack of correlation between director performance and compensation. “There is no direct link between your performance and salary,” they asserted. This disconnect, they argued, is demoralizing for individuals working diligently in both the public and private sectors. The official further noted that directors are exploiting existing provisions to maximize their earnings, a practice that must be rectified.
The situation is further complicated by the existence of “concrete contracts” that limit the government’s ability to directly mandate wage reductions. In July, the government, led by Bolojan, requested that heads of state companies earning more than President NicuÈ™or Dan voluntarily reduce their salaries by the end of 2026. However, the prevalence of these contracts has hindered progress.
A separate case involving alleged misuse of state funding for Romanian films has further underscored concerns about accountability within state-backed entities. A advice highlighted the recent acquittals in the case of Eugen Șerbănescu from the CNC, who escaped 34 charges related to 46 million lei in damages.
The government’s response to these issues remains under growth, but the message is clear: a reevaluation of compensation practices at state-owned companies is underway, with a focus on fairness, transparency, and a stronger link between performance and reward.
