Workers salaries on the chopping block at Eesti Energia

  • 2009-04-08
  • By Ella Karapetyan
TALLINN - The head of Eesti Energia Sandor Lijve 's who is among Estonia's highest paid among executives 's has come under criticism for plans to cut the salaries and benefits of his workers.

Lijve is continuing negotiations with trade unions about canceling workers benefits, expected to save the company some 500 million kroons (31.9 million euros), online portal reported on April 7.
The Eesti Energia boss earns 2.2 million kroons per year, however, until now there has been no discussion on reductions to his own generous salary entitlements.
According to Eesti Energia's press secretary Marina Bahmann the company was currently discussing a 10 percent wage cut for company heads.

However, according to Bahmann additional measures would still be needed to trim company expenses.
The state-owned energy production company is considering plans to slash workers' benefits, including Christmas bonuses and holiday pay, to the tune of 100 million kroons.
The reorganization of commercial activities and internal restructuring is also expected to trim up to 400 million kroons from the company's budget expenditures.

If these steps fail workers' salaries may be cut, said Bahmann.


Estonian Minister of Finance Ivari Padar said the current situation made it necessary to economize on expenses, including worker's benefits, within commercial organizations.
However, he also stressed salary levels of top management officials should also be cut from the current high levels.

The generous salaries paid to the heads of state enterprises have come under increasing scrutiny.
In 2008 the income of joint-stock real estate company Riigi Kinnisvara chairman Jaaka Saarnitja was increased by 200,000 kroons last year to 1.24 million kroons, in spite of the sector suffering a deep recession.
Politicians, councilors and trustees of state enterprises are also among those to receive handsome salaries.
The question of payments has been the subject of discussions amongst state enterprises submitting to the Ministry of Finance.

As a result management incomes of state-owned enterprises will be lowered in comparison with last year.
According to the Minister of Economics Juhan Parts salaries of heads of state enterprises should be in line with salaries of the top management in large private enterprises such as Swedbank.