Strong disapproval was evident in the way some newspapers presented the report by the European Banking Authority (EBA) about the remuneration of top bankers in Cyprus.
“Nine banking golden boys in Cyprus are paid the annual total of €15,402,172, of which €12,596,114 was annually paid as salary and the remaining €2,806,058 was variable income (bonuses),” Phileleftheros reported. It added that the total annual income of five bank executives was €8.76 million.
The Akel mouthpiece, Haravghi, understandably was more disapproving, reporting that ‘in Cyprus of workers on low wages and benefits, there are nine bankers with average annual pay of €1.7 million each’.
It also noted that, according to the EBA, the number of big bankers in Cyprus has doubled, as has their remuneration. For the communists of Akel such big pay packages are obscene because they promote inequality and exemplify one of the worst aspects of capitalism.
They do not consider bank executives to be workers even though the latter are paid a monthly salary, albeit a very big one, and could be sacked any time if their work is not satisfactory. Yet bank executives are in the job market just like any worker, the only difference being that there are much fewer of the former, especially with a good track record, therefore they are paid big salaries. Like most prices in a market economy, the wages of bank executives are determined by supply and demand, in contrast to the wages further down the bank hierarchy, which are determined by the union.
That top bank executives are now being paid big money for their services is because things have changed in the sector and the boards no longer promote people from within the bank, as was the practice in the past. Boards want bankers with a proven track record and experience gleaned from working at banks abroad and they are prepared to pay big bucks for this. Could the newspapers begrudge the Bank of Cyprus’ CEO John Hourican his big fat salary, considering how he brought in foreign investors, stabilised the bank and listed it on the London Stock Exchange?
The bank may have recorded huge losses in 2017 because of provisions for bad debts, but would a smaller pay package for Hourican have made the slightest bit of difference? If he was not there, the losses could have been much bigger. At the Cooperative Central Bank, in contrast, a man of limited banking experience and no track record was appointed CEO and he failed to turn the bank round. Should he be praised because he was probably earning less than a fifth of Hourican’s annual salary?
It is no coincidence that the disparaging term ‘golden boys’ is invariably used by the union bosses, who, like the communists, do not value excellence or high-calibre workers, because they champion mediocrity and do not want a salary to reflect a worker’s contribution to the business.