IN THE MONEY: The salary of airBaltic boss Bertolt Flick, who reportedly received more than 400,000 euros in the first 11 months of 2008, is likely to be reviewed.
RIGA - Transport Minister Kaspars Gerhards has recently announced that the large salary of Bertolt Flick, CEO of airBaltic, may be modified after the process for the disposal of airBaltic shares from SAS has been completed.
"As soon as these legal technicalities are settled, we will have a different situation. There will be two holders jointly running the company, appointing the council and setting salaries," said Gerhards.
Bertolt Flick reportedly received over 300,000 lats (426, 861euros) in the first 11 months of 2008, with 100,000 of that sum having been paid in July.
The fact that the information regarding the CEO's salary has been made public has been of concern to the company. The company has gone to the Prosecutor General's Office arguing that such records should have remained private and a breach of privacy may have been comitted.
"Once the legal issues are solved, the airBaltic shareholders, namely the Latvian state and BAS, could deal with the issue of salaries 's revise them, leave them unchanged or resolve the issue in some other way," said Gerhards.
Gerhards said that the large salaries to airBaltic board members were based on a 1995 agreement between the Latvian state and SAS as the primary airBaltic shareholders.
In the agreement, airBaltic board members were appointed by SAS and their salaries consisted of two components 's one determined by Latvia and the other by SAS. Flick's salary had been set by SAS.
After the Latvian state turned down the buy-out offer by SAS, the airline sold its 47.2 percent stake in airBaltic to Baltijas Aviacijas Sistemas (Baltic Aviation Systems), a company fully owned by Flick.
The transaction has not been formally completed and the termination of the agreement between SAS and the Latvian state has to be annulled.
Gerhards said that airBaltic operated on the international market, had become a serious player in the region and salaries to its staff had to be competitive.
Earlier Flick said that his salary had been set in accordance with the agreement upon the founding of airBaltic under which the Latvian state had agreed to the requirements of SAS regarding the salaries of the staff in line with international standards and confidentiality clauses.
AirBaltic, founded in 1995, is 52.6 percent owned by the Latvian state and BAS with 47.2 percent of the company purchased from Scandinavian SAS.
