Halldór Benjamín, director of the Confederation of Icelandic Enterprise, SA, is highly critical of the Landsbankinn bank council’s decision to raise the pay of its chief executive officer Lilja Björk Einarsdóttir twice in one year, Fréttablaðið reports. He accuses the council of being tone-deaf.
The CEO of Landsbankinn bank, Lilja Björk Einarsdóttir, received a pay raise of 1.2 million ISK in July 2017 and then another increase of 550 thousand ISK in early 2018, making her total salary 3.800.000 ISK a month.
The pay raise is now being questioned by union leaders and the public, after Már Guðmundsson, governor of the Central Bank of Iceland, warned against excessive pay raises in a recent video, saying they would inevitably lead to increased interest rates and unemployment in the country. Már’s remarks have caused debate and now Lilja Björk’s pay raises are being questioned.
“The news of her pay raises are bad,” Halldór says. “The fact that this is happening in a state-owned bank, going against the will of its owner makes it both an unwise and indefensible decision, in my opinion. This rate of pay raise does in no way represent norms in the job market. Luckily, this kind of behaviour is an exception amongst the largest companies in Iceland. That, however, doesn’t lessen its seriousness or the lack of judgement that is revealed by this decision.”
Katrín Jakobsdóttir, Iceland’s Prime Minister has also chimed in, calling the the pay raises “incomprehensible”.
“This doesn’t affect the leeway of companies in the open market, of course,” Halldór adds. “Most companies in Iceland are small or medium sized, and the economy is now slowing down. The economic upswing is over, and pay agreements must take that into consideration. We at SA have in recent years recommended that pay raises of CEOs are in harmony with other raises.”