Icelandic Central Banker Promised Higher Salaries? Skip to content

Icelandic Central Banker Promised Higher Salaries?

The board of directors at the Central Bank of Iceland has submitted a proposal on raising the monthly salary of Central Bank governor Már Gudmundsson from ISK 1.3 to 1.7 million (USD 10,000 to 13,000, EUR 7,600 to 10,000). The pay raise had allegedly been promised by the Prime Minister’s Office.

The Central Bank of Iceland. Photo by Páll Stefánsson.

According to the sources of, before Gudmundsson accepted the position at the Central Bank, he made an agreement with Prime Minister Jóhanna Sigurdardóttir that he would receive a salary comparable to that of his predecessor, Svein Harald Oeygard. Thus, the pay raise proposal was to fulfill the PM’s promise.

Sigurdardóttir commented to Stöd 2 yesterday that she has not made any promises regarding the salary of the Central Bank governor; his salary will be determined on the basis of the wage council law. states that a special provision was added to the wage council law so that the alleged promise on pay raise could be fulfilled.

The Icelandic parliament decided in the autumn of 2009 that no state officials should have basic monthly salaries exceeding that of the PM, which is ISK 935,000 (USD 7,200, EUR 5,500). Consequently the wage council lowered the salaries of 22 state officials in February 2010.

Minister of Economic Affairs Gylfi Magnússon told that it is out of the question to raise the Central Bank governor’s salary. “If the plan is to raise the salary of the central banker to almost double that of the prime minister, then people are working against the will of the government.”

Gudmundsson himself said the issue is not about raising his pay but rather by how much his salary should be cut in accordance with the terms on which he was originally hired.

“It is obvious that if my salary will be cut by 23.8 percent—which might be the conclusion—it will have consequences for the Central Bank and I’m not sure that it is fair to all the people who work there. But I will try my best, if it comes to that, to share the burden as justly as possible,” Gudmundsson commented.

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