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Bank CEO Salaries to be Reduced

The salaries of the CEOs of both Landsbankinn and Íslandsbanki will be reduced in accordance with a formal request from the Minister for Finance and Economic Affairs, Kjarninn reports. The decision comes in the wake of considerable criticism from both sides of the political spectrum, with critics variously characterizing the salaries of Landsbankinn CEO Lilja Björk Einarsdóttir and Íslandsbanki CEO Birna Einarsdóttir as “excessive” and “tone deaf” in light of ongoing wage disputes for some of Iceland’s lowest-paid workers. Up until now, however, the CEOs’ salaries had been defended by the board of directors for both banks.

This decision was announced in a letter written by Lárus Blöndal, the Chairman of the Board of the Icelandic State Financial Investments office (ISFI), which “manages the state’s holdings in financial undertakings,” and ISFI director Jón Gunnar Gunnarsson.

As previously reported, Landsbankinn CEO Lilja Björk Einarsdóttir received significant pay raises twice in one year. She received her first raise of ISK 1.2 million [$10,045; €8,831] in July 2017, and then another increase of ISK 550,000 [$4,604; €4,047] in early 2018, making her total salary ISK 3.8 million [$31,809; €27,966] a month. Meanwhile, as of January 2017, Íslandsbanki CEO Birna Einarsdóttir was making ISK 4.2 million [$35,162; €30,912] a month, on top of which she also received ISK 200,000 [$1,674; €1,472] in perks and additional benefits.

RÚV reports that per the reductions, the board of Íslandsbanki decided to lower Birna Einarsdóttir’s salary, after which, the board of Landsbankinn decided to follow suit. As of April 1, Íslandsbanki’s Birna will receive ISK 3.65 million [$30,906; €27,338], before additional benefits and perks; ISK 3.85 million [$32,599; €28,836] after. Meanwhile, one of Lilja Björk’s pay raises will be reversed, bringing her monthly salary down to ISK 3.3 million [$27,942; €24,716], before additional perks and benefits; her final monthly salary, including benefits, will be ISK 3.5 million [$29,635; €26,214].

The Icelandic government owns 100% of Íslandsbanki and 98.2% of Landsbankinn.

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