Increased Remuneration for Tarom's Board of Directors Doubled
In an unexpected move amidst ongoing discussions about fiscal austerity measures in Romania, the shareholders of the state-owned airline, Tarom, have decided to double the monthly gross compensation for Board of Directors members. The new salary, effective immediately, will see each Board member receiving RON 24,148 (approximately EUR 5,000) per month, up from the previous RON 12,500 (EUR 2,500).
This decision, which was recommended by Tarom's Nomination and Remuneration Committee and validated by AMEPIP, has been met with mixed reactions. While the airline has been grappling with financial challenges, having recorded losses for over 15 consecutive years according to data from the Ministry of Finance, the increase might be an attempt to attract or retain experienced professionals on the board, given Tarom's strategic needs.
The new Board, appointed for a full four-year mandate in June 2024, replaces a series of provisional administrators. Six out of the seven new appointees are politically connected and had previously held temporary roles within the airline's leadership. Key state stakeholders, including the Ministry of Transport, ROMATSA, and CN Aeroporturi București, have endorsed the decision.
However, Longshield Investment, formerly known as SIF Muntenia, was the only abstention in the decision. Transport minister Ciprian Şerban (PSD) also expressed disapproval of well-paid positions without common sense during a difficult period for the country. He further stated that he would use his prerogatives to reduce the compensation of board members.
It's worth noting that this pay rise for Tarom's Board members follows similar decisions across other state enterprises under the Transport Ministry's authority. At CN Aeroporturi București (CNAB), allowances were recently raised to nearly RON 70,000 (EUR 14,000) gross per month.
Despite the financial record, Tarom has estimated a net profit of RON 278 million (EUR 55 million) for 2024. The exact motivations behind the increase remain speculative, as neither Tarom nor the government has provided direct statements on the matter. However, it can be speculated that the increase might be part of a more nuanced strategy to ensure the airline's stability and competitiveness, especially considering its role as a state-owned entity and its importance to Romania's transportation network.
In conclusion, the doubling of Tarom's Board of Directors' compensation has raised eyebrows amidst Romania's fiscal austerity measures. While the reasons behind the increase are not explicitly stated, the move could be seen as an effort to attract or retain experienced professionals and ensure the airline's competitiveness. The future implications of this decision will be closely watched as Romania navigates its economic challenges.
- The decision to double the compensation for Tarom's Board of Directors, amidst Romania's fiscal austerity measures, has sparked discussions in politics, business, and general-news sectors.
- The increase in remuneration for Tarom's Board members comes in line with similar decisions in other state enterprises under the Transport Ministry, raising concerns about the impact on Romania's overall financial situation.
