FBiH Government Proposes Salary Cuts for Barš, Džaferović, Mandrapa

The Federal Government, at today's session, determined the Draft Law on Salaries and Other Material Rights of Members of Management Bodies and Other Bodies of Institutions of the Federation of BiH, Public Enterprises and other business companies in majority ownership of FBiH.

The Draft Law places the Banking Agency of FBiH, the Development Bank of FBiH, and the Energy Regulatory Commission of FBiH (FERK) in the same position as all other institutions, unlike the provisions in the current Law which grant them a privileged status regarding the maximum amount of salaries and compensation. This means that the salaries currently received by the directors of the Banking Agency of FBiH, Zlatko Barš, the Development Bank of FBiH, Ramiz Džaferović, and Risto Mandrapa, director of FERK, would be significantly reduced.

The monthly net salary for the director of an institution, the president of a commission, for other members of management, deputy director or director and deputy director and one or more executive directors of an institution, as well as the deputy president and members of a commission, can be set at a maximum of four times the average monthly net salary paid in FBiH in the previous three months.

The Draft Law provides for monthly net compensation amounts for the work of the president of the management board and/or supervisory board of an institution or the management council, or expert council, to be at most one average salary, and for their members, the compensation amounts to 90 percent of the monthly compensation of the president.

The monthly net salary for members of the management of a business company with more than 1,000 employees and a total annual revenue exceeding 250,000,000 KM can be set at a maximum of five times the average monthly net salary paid in FBiH in the previous three months.

The monthly net compensation for the work of the president of the supervisory board of a business company with more than 1,000 employees and a total annual revenue exceeding 250,000,000 KM can be set at most at 1.2 times the average net salary in FBiH, and for members of the supervisory board of such a business company, the monthly net compensation amounts to 90 percent of the monthly net compensation for the president of the supervisory board.

The monthly net salary for members of the management of a business company that does not meet these conditions regarding the number of employees and/or total annual revenue can be set at a maximum of four times the average monthly net salary paid in FBiH in the previous three months.

Furthermore, depending on the business results in the previous reporting period, these salaries can be increased or decreased by up to 30 percent in the period until the adoption of the next annual financial report of the business company.

Upon the entry into force of the new law, the current Law on Salaries and Other Material Rights of Members of Management Bodies of Institutions of FBiH and Public Enterprises in Majority Ownership of FBiH from 2009 would cease to apply.