There has been a recent public outcry over the 6,500-euro monthly salary of Taavi Laur, the new CEO of Enterprise Estonia, or the news that Sandor Liive, CEO of Eesti Energia, earned 150,000 euros last year. In comparison, Prime Minister Andrus Ansip earns just under 4,000 euros a month.
Peep Peterson, the new chairman of trade unions, says that Estonia’s real problem is the huge gap between high-earners and low-earners.
Peterson says that the contrast between those earning top salaries and those who make minimum salary is too stark and that employee wages must catch up with the income of top earners.
“Estonians today are leaving for work in Finland and I have to agree with the opinion of banker Indrek Neivelt that the Estonian tax system must be adjusted so that lower wages are taxed only modestly because it would be an incentive to increase them. My key question is not how much the top people are making, but I would like employees to earn more,” said Peterson.
Tõnis Arro, head of the Estonian Development Fund, says that top positions are not overpaid, on the contrary.
Arro says that responsibility comes with a salary and that if we need some limits, it should be first comprehensively analysed.
“The second issue is that we must compare it with the market salaries paid to business executives. If we want to hire managers from the labour market and you say that you want to pay twice less to the person than the market average, you would get candidates who are only half as good. After all, we don’t want to be managed by managers who are worse than in private enterprises,” said Arro.
European Parliament member Indrek Tarand says that in his opinion top earners should be liable for their actions with their personal assets.
“The European Union has been trying to solve the problem for 18 months and reach an agreement that the bonus paid to the head of a credit institution should not exceed his or her annual salary,” said Tarand, adding that Estonia, on the other hand, was putting in charge of Enterprise Estonia a former middle manager of an obscure bank and pay him two prime minister’s monthly wages.
Tarand was also referring to the former CEO of Estonian Air, Tero Taskila, who earned 33,000 euros a month and left the near-bankrupt airline with a severance fee of 100,000 euros.