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Draghi Faces 50% Pay Cut When He Succeeds Trichet as ECB Head

Italy Central Bank Governor Mario Draghi
Mario Draghi, governor of Italy's central bank. Photographer: Michele Tantussi/Bloomberg

June 1 (Bloomberg) -- Bank of Italy governor Mario Draghi will face a pay cut of 50 percent when he replaces Jean-Claude Trichet as president of the European Central Bank in November.

Draghi’s salary in 2010 was 757,714 euros ($1,090,123), more than twice Trichet’s take, the Rome-based bank said on its website yesterday. It was the first time the governor’s salary was made public. Trichet’s basic pay was 367,863 euros, according to the ECB’s website. Federal Reserve Chairman Ben S. Bernanke pulled in $199,700 in 2010.

On May 17, euro-area finance ministers nominated Draghi to become the next head of the Frankfurt-based central bank when Trichet’s eight-year term ends on Oct. 31. Draghi, 63, who also heads the Basel-based Financial Stability Board, is currently the only candidate and European Union leaders are due to ratify him for the post at a two-day meeting in Brussels starting June 23.

In addition to their basic salaries, Trichet and ECB board members receive allowances for expenses such as accommodation. Trichet is provided with a residence owned by the Frankfurt-based ECB in lieu of a housing allowance.

Draghi’s successor at the Bank of Italy won’t fare as well as the outgoing governor. The central bank has adopted a 10 percent pay cut starting in 2011.

To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net.

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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