Photographer: David Paul Morris/Bloomberg

Looking for Wage Growth? Ask Latvia’s Central Bank Governor

Baltic central bank heads saw the biggest pay rises last year

Europe’s central bankers, desperately scouring the landscape for signs of pay growth, would do well to look to their own Baltic peers.

The central bank governors of those euro members saw the biggest annual pay increases of the group last year, according to data compiled by Bloomberg. Latvian Governor Ilmars Rimsevics’s gross pay rose 10 percent to about 151,000 euros ($179,000), Lithuania’s Vitas Vasiliauskas’s salary increased almost 7 percent to around 89,000 euros and Estonia’s Ardo Hansson’s wage grew about 5 percent to 116,000 euros.

That may reflect inflation, given that price growth in the Baltic countries is about to two to three times higher than in the euro-area as a whole. Their economic growth is also twice the pace.  

Even so, that still leaves Belgium’s Jan Smets holding the highest gross wage at 481,000 euros – almost five times that of his Lithuanian counterpart. But central-banker compensation in the bloc doesn’t necessarily correlate with seniority or economic heft.

Luxembourg – the region’s wealthiest nation – paid its head Gaston Reinesch 181,000 euros last year, the same as in 2015 and among the lowest of the group. And while ECB President, Mario Draghi got a 1 percent raise to 389,760 euros last year – outstripping feeble euro-area inflation –  that still leaves his pay lagging behind his Belgian, Italian and German colleagues. He also benefits from low taxes.

Wages rose an annual 2 percent in the euro area in the second quarter, with Spain’s rising just 0.4 percent and Lithuania’s surging 10 percent. The other Baltic countries saw a pay bump of about 8 percent. 
Not all euro central banks publish information on what their leaders make and total benefit packages are not always available either.  Klaas Knot, who heads the Dutch Central Bank, had his remuneration rise partly as a result of a rule change that subjected discounts on mortgage loans to the wage tax as of last year.
In France, Francois Villeroy De Galhau’s 283,000 euro wage was supplemented by 68,000 euros of housing support, while Bank of Spain Governor Luis Maria Linde’s pay of about 177,000 euros was further bolstered by two bonuses. Slovak central bank Governor Jozef Makuch’s 239,000 euro compensation is only published as a sum total combined with the salary he receives for work outside the bank.

— With assistance by Radoslav Tomek, Boris Cerni, Milda Seputyte, Ott Ummelas, Maria Tadeo, Georgios Georgiou, Lorenzo Totaro, Joao Lima, Christos Ziotis, Mark Deen, and Stephanie Bodoni

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