Power president has to settle for less

RIGA - Latvia's state-owned power utility Latvenergo has postponed paying bonuses to its board members following harsh orders from Economy Minister Aigars Kalvitis.

Latvenergo had an audited profit last year of 20.14 million lats ($31.57 million), leading board members to lobby for hefty bonuses.

Karlis Mikelsons, Latvenergo's president, expected a 35,000 lat bonus, according to Evita Timofejeva, spokeswoman for the Ministry of Economy. Last year, from April 1, Mikelsons earned 45,311 lats before tax, according to figures from the State Revenue Service.

"Board members calculated their bonuses on last year's figures," she said. "In total, 158,000 lats were to be shared by members of the advisory board and 119,000 lats were to be divided by the members of the board, but not proportionally."

This, however, would be against Latvian regulations, Kalvitis believes, because three members of the advisory board are state trustees and may not receive any other bonuses apart from their regular salary.

In order to put a stop to Latvenergo's bonus payments, Kalvitis ordered members of the board to rethink the amount and set the bonuses according to the Cabinet of Ministers' regulations on wages in state-owned companies.

These rules dictate that members of the board should not receive more than three months salary as a bonus, and this is what the minister suggests.

At a shareholders meeting June 28, it was decided that the advisory board would not receive any bonuses at all for work done last year, but the bonus system for board members was not decided. A final decision on the issue is expected July 9 when shareholders meet again.